Weak Quarter for Intel Shocks High-Tech Market

Intel Corp., the world’s largest maker of computer chips, shocked Wall Street on Friday by predicting its second-quarter results would be weaker than expected, sending its stock into a tailspin.

Intel cited surprisingly weak demand for its microprocessor chips, which are the “brains” in 85% of all personal computers. It said that both profits and revenues would be hurt by slow sales, particularly in Europe.

Investors’ reaction was swift. Intel’s stock initially tumbled more than 15% in morning trading on the Nasdaq stock market. The plunge pulled other high-technology shares sharply lower and sent the broader market nosediving as investors fretted that Intel’s prediction of slowing demand for computers would erode profits at major computer makers.

But a closer look at Intel’s situation reassured some Wall Streeters. Intel stock recovered nearly half its loss by early afternoon, down only 8.6%, or $14.14 at $149.62 1/2. Major stock indexes also edged back.