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Intel downgrade hits chip stocks
SAN FRANCISCO |
SAN FRANCISCO (Reuters) - Shares of semiconductor companies fell sharply on Friday, led by Intel Corp (INTC.O) after JPMorgan downgraded the stock on concern over slowing demand from personal-computer makers.
Intel was down $1.73, or 7 percent, at $22.94 in midday trading on Nasdaq after shedding as much as much as 7.5 percent. Concerns over slowing economic growth weighed broadly on U.S. stocks as new data showed weak U.S. job growth in December.
JPMorgan analyst Christopher Danely downgraded Intel to "neutral" from "overweight," saying Intel experienced a late-quarter slowdown in order rates from PC makers, "which we believe negated the upside we believed Intel experienced earlier" in the fourth quarter.
Danely, in a note to clients, cited weakness in PC orders in Europe after Acer Inc (2353.TW), the world's fourth-largest PC maker, and British electronic-goods retailer DSG International Plc DSGI.L cut sales estimates due to lower-than-expected demand in Europe.
The 18-member Philadelphia Semiconductor Index slumped more than 4 percent, with Intel competitor Advanced Micro Devices Inc (AMD.N) falling 7.4 percent to $6.27 on the New York Stock Exchange.
Dell Inc (DELL.O), the world's second-largest PC maker and one of Intel's biggest customers, fell 5.6 percent, and No. 1 Hewlett-Packard Co (HPQ.N) shed 2.7 percent.
(Reporting by Philipp Gollner, editing by Leslie Gevirtz)
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