The Dow Jones Industrial Average (INDEX: ^DJI) took a breather last week and just about broke even. But it's resumed its downward spiral this week, down another 250 points, and with the same factors in place that caused the index to lose 2.7% so far this month still in place -- weak earnings here at home and a worsening financial crisis overseas -- expect even lousier returns by the Dow going forward.

Tech and telecom stocks were some of the big anchors this week, with Clearwire (NASDAQ: CLWR) falling 17% as a buyout didn't look imminent following SoftBank's bid for Sprint (NYSE: S). On top of that, Akamai (NASDAQ: AKAM) fell 5%, Qihoo 360 (NYSE: QIHU) was down 8%, and Digital River (NASDAQ: DRIV) was off almost 7%, all weighing down the sector.

Yet over the market's last five trading days, some stocks did even worse than the indexes or the Internet sector, falling by steep, double-digit percentages. Chip maker Advanced Micro Devices (AMD -0.71%) lost a quarter of its value this past week and is down 37% in October after finally realizing just how weak the PC market is. After reporting disastrous quarterly numbers, the chip maker is going to slash its workforce by 15,000 employees and turn its attention at last to tablets. Even sclerotic Intel (NASDAQ: INTC) heeded the call of mobile computing long ago and has been developing chips for smartphones and tabs.

Despite the new forward-thinking, AMD is still tightly entwined with Microsoft (NASDAQ: MSFT). It will have 125 AMD-based systems set to go live with Windows 8, and with 85% of its sales still tied to the PC industry, that legacy business will rule its results for many quarters to come.

Equally troublesome is the rising possibility of a cash crunch; analysts at Bernstein Research worry cash levels may be cut in half over the next year. Even as it seeks to broaden its horizons, AMD will face competition on its home PC turf. Qualcomm (QCOM 0.91%) rules the smartphone niche and NVIDIA (NVDA -2.34%) owns the Android-based tablet market, both of which have designs on spreading into the PC market. Expect more earnings pressure for AMD.

72 inches down
Shares of robot maker iRobot (IRBT -1.89%) were also crushed after a dismal earnings report, but not so much about what happened in the past (where it beat analyst expectations), but rather about what was coming in the future. While 80% of iRobot's business comes from its home robot division -- the one that sells Roomba vacuums, floor-washing devices, gutter cleaners, and pool scrubbers -- lower defense spending continues to erode profits. iRobot will be restructuring its defense and security segment to prevent it from negatively impacting the rest of the business, as well as reducing its size, meaning it will be closing down its unmanned underwater vehicle division. Although there remains a market for the vehicle, defense spending cuts mean it will only drag down consolidated performance in the fourth quarter as well as next year.

One would imagine if sequestration spending cuts are enacted, the situation will be even more dire. So it's smart for iRobot to get out in front of the problem now and focus more fully on its home division that continues to enjoy success: last quarter, revenue jumped 33% from domestic and international markets.

The restructuring is going to take a toll on fourth-quarter results, causing the company to record a loss of as much as $0.39 per share, a far cry from the $0.20 Wall Street had been anticipating. Sure, we knew government spending cuts were hurting companies, but the axe iRobot's taken to its operations seems to have caught everyone by surprise.

I do think it will make the robot maker's business stronger, though, so I'll be maintaining my outperform rating of iRobot on Motley Fool CAPS, the 180,000-member investor community that translates informed opinions into stock ratings of one to five stars. iRobot carries a lofty four-star rating, as 90% of the 1,267 members weighing in on it also believe it will outperform the market averages. Let me know in the comments box below if you think there's danger lurking in the reboot of iRobot.