Investors slammed semiconductor stocks Thursday amid fears that demand for computer chips is drying up as the economic malaise plaguing the U.S. is spreading to the rest of the world.
The Philadelphia Semiconductor Index, which tracks the industry's largest and best-known companies, fell to a 5 1/2-year low of 323.13 before recovering slightly to finish the session at 324.08, down 11.46, or 3.4 percent. The erosion was only slightly worse than the technology-laden Nasdaq composite index, which declined 3.2 percent Thursday.
Several major semiconductor companies have been providing a sober outlook during a conference hosted by Citi Investment Research conference this week, according to a note issued Thursday.
"The mood is decidedly downbeat, reflecting macro-level concerns," wrote Citi analyst Glen Young. Although most companies seem to feel they will hit analysts' earnings targets for the current quarter, Young said "tone from management was poor. Europe was a common thread as a source of weakness."
Thursday's downturn nailed all 18 companies that make up the Philadelphia Semiconductor Index.
Intel, the world's largest chip maker, shed $1.02, or 4.7 percent, to finish at $20.52. Stocks even harder hit included: Infineon Technologies AG, which dropped 63 cents, or 7.1 percent, to $8.27; STMicroelectronics NV, which fell 92 cents, or 7 percent, to $12.15; Marvell Technology Group Ltd., down 69 cents, or 5.5 percent, to $11.94; Xilinx Inc., off $1.24, or 5 percent, to $23.38.
The semiconductor companies suffering less minor bruises included Linear Technology Corp., which decreased 54 cents, or 1.8 percent, to $30.40, and Novellus Systems Inc., which declined 36 cents, or 1.7 percent, to $21.46.
Terms & Conditions
RSS Headlines
Fool UK