The Dow Jones Industrial Average (DJINDICES:^DJI) was down about 0.1% at 11:15 a.m. EDT, with the index struggling to find a direction. The U.S. reported over 77,000 new cases of COVID-19 on Thursday, according to data from Johns Hopkins University, easily a new record.

Microsoft (NASDAQ:MSFT) stock was down a bit on Friday morning after the company reportedly cut a small number of jobs. Meanwhile, Intel (NASDAQ:INTC) handily outperformed the market after an analyst pointed to solid PC demand in the second quarter as a reason to be optimistic on the semiconductor stock.

A circuit board.

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Microsoft cuts jobs

Shares of software and cloud computing giant Microsoft were down about 0.6% Friday morning following news that the company has initiated a small round of layoffs. The initial report came from Business Insider, which put the number of jobs cut at under 1,000.

Microsoft began a new fiscal year on July 1, and it's not uncommon for companies to make minor workforce changes at such a time. Microsoft reportedly cut some jobs at online news portal MSN.com as it looks to replace some employees with artificial intelligence. The Azure cloud business also reportedly saw some job cuts.

Some of the job cuts may be related to Microsoft's decision to permanently close its retail stores. Microsoft had temporarily closed its stores due to the pandemic, but the company announced in June that it would abandon its effort to operate physical retail locations.

The pandemic hasn't been able to derail Microsoft's business so far, other than some supply-chain disruptions for the hardware business. In the fiscal third quarter, Microsoft's revenue surged 15% on strong growth in cloud computing and subscription software. Microsoft continues to grow Office 365 on both the consumer and commercial sides, and its Microsoft Teams collaboration offering has been seeing explosive growth.

Microsoft will report its fiscal fourth-quarter results on July 22. The stock is up about 29% since the beginning of the year.

Intel benefiting from strong PC demand

The first quarter of this year was a rough one for the PC industry as supply-chain constraints took a bite out of sales. Gartner reported that global PC shipments dropped by 12.3% year over year, the worst performance since 2013.

The situation improved in the second quarter. Gartner reported a 2.8% increase in shipments compared to the prior-year period, partly due to distributors and retail channels restocking following the pandemic-related disruptions. IDC reported an 11.2% year-over-year increase in PC shipments for the second quarter, partly because it includes Chromebooks in its data while Gartner does not.

Intel still dominates the market for PC chips, even though rival Advanced Micro Devices has staged a comeback in recent years. Bank of America analyst Vivek Arya believes Intel will beat analyst estimates in the second half of 2020 thanks to strength in the PC market and the upcoming launch of new chips.

BofA maintained its buy rating on Intel stock on Friday along with its $70 price target. How long this strong demand environment lasts, given that the U.S. economy is in recession and the pandemic is nowhere near under control, remains to be seen. Intel stock was up about 1.8% Friday morning.