Intel Gets Crushed as the Dow Treads Water


After several days of focusing on the economy, investors have had their attention pulled squarely back on earnings season, and some of the news hasn't been as good as they had hoped. In particular, Intel's results last night sent the stock into a tailspin, but so far today, at least, the bad earnings news hasn't had much impact on the broader market. The Dow Jones Industrials are down just five points as of 10:55 a.m. EST, and the broader market is also down only modestly.

Intel's quarterly report sent its shares down 6.3% this morning, as investors fear the tech giant's continuing failure to prove that it can overcome what Fool contributor Alex Planes referred to last night as "the slow death of the PC industry." Despite topping expectations for bottom-line earnings, the longer-term problem is that Intel has seen sales and earnings peak. Increasingly, the company will have to rely on its data center segment to produce the growth Intel investors want to see.

Elsewhere, Amarin dropped 5.6% after an equally inexplicable 10% rise yesterday. The company has drawn speculators trying to bet on whether Amarin's Vascepa drug, which helps reduce triglyceride levels, will win new chemical-entity status from the FDA and therefore be entitled to five years of exclusivity. Still, Fool contributor Brian Orelli notes that exclusivity is essentially worthless unless it can help Amarin fetch interest from a possible acquirer.

Finally, Arch Coal is up 4.2%. Bottom-fishing in the coal industry has seemed appealing from a value standpoint for some time, as coal stocks got crushed last year due to rock-bottom natural-gas prices displacing coal use. Yet those unfavorable conditions in natural gas continue, and it's hard to see where substantial gains in coal prices will come from, especially as more utilities convert from coal-fired to gas-fired power plants.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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