Global markets shuddered yesterday in anticipaition of a nasty unemployment report from the US today. Pre-trading on the dow was down, and the dow took a healthy dive early on dropping close to 250 points before noon.Lost: 1.9 million jobs
The economy shed 533,000 jobs in November, according to a government report Friday - bringing the year's total job losses to 1.9 million. November had the largest monthly job loss total since December 1974.
In contrast to the dows dive in early trading, AMD was actually up 14 cents while Intel was down over 10 cents
Intel Corp. could be preparing to lay off as much as 10 percent of its work force and cut its fourth-quarter guidance for the second time, an analyst said Friday, because the economic crisis has caused computer makers to sharply curtail the amount of processors they buy for those machines.
Intel (INTC Quote - Cramer on INTC - Stock Picks) numbers cut at Barclays. Recent industry checks and AMD's warning suggest that near-term margins will suffer. Equal-weight rating and new $14 price target.
However, it doesnt really look like the downgrade was the cause, as AMD was downgraded today as well, ableit by Morgan Stanley rather than Barclays:
Advanced Micro Devices (AMD Quote - Cramer on AMD - Stock Picks) numbers cut at Morgan Stanley through 2010. Company warned of materially lower sales, and can't cut costs fast enough. Underweight rating and new $1.50 price target.
So, it looks like the potential of a very bad 5~6000 head cut at Intel turned into a bonus day for AMD early in trading -9:30AM-ish. Oddly, even with the global markerts shaking, the dow closed the day up a suprising 260 points with AMD gaining 5 cents per share, and Intel picking up 52 cents inspite of the downgrade and analysts estimates of a large layoff.
All I can say it that monday (sunday, here for the asian markets) promises to be an interesting day.
I kinda expected this. With the recession its not easy to get people to buy stuff. And that leads to job cut backs for people and job loss across the country. I wouldn't be suprised if we don't see more later on.