By James Langton
(September 22 – 09:00 ET) – Intel Corp. is going to kill the market opening today. The influential chipmaker warned that third quarter profits would fall below estimates, blaming its performance on the weak euro. The news sent Intel down 20% in after-hours trading.
The aftermath this morning will likely hit computer manufacturers such as Dell, software firms such as Microsoft, and networkers, including Cisco and Nortel.
Markets will plunge in response, Dow futures are pointing to about a 200 drop on the open, with Nasdaq indicating a drop of about 90, the threshold at which futures trading is halted.
There are no economic releases in Canada or the U.S. today, leaving markets to concentrate on selling tech stocks.
The euro, which has become the universal profit excuse in the third quarter, is actually up this morning to US89¢ from below US86¢yesterday. The U.S. Federal Reserve Board, the Bank of Canada, the Bank of Japan and the European Central Bank are all said to be buying euros. Crude oil is also sliding on the expectation that the U.S. will release reserve oil supplies.
In Europe the stock slide have been surprisingly moderate. The FTSE is down 50 points to 6,149. The CAC 40 is off 61 to 6,193. The DAX is down 48 points to 6,635.
Overnight in Asia markets tanked on the Intel news. The Nikkei finished off 493 points to 15,818. The Hang Seng closed the week down 552 points to 14,612.
The only merger news is negative, British Airways plc has abandoned its plans to buy KLM Royal Dutch Airlines. It is also being reported that America Online Inc. and Time Warner Inc. are offering new concessions to the European Commission to salvage approval for their merger.