UPDATE 4-Chip stocks fall on BofA Merrill downgrades

giovedì 19 novembre 2009 17:33

* BofA Merrill downgrades Intel, LSI, Marvell, ASML

* Intel, AMD drop 5 percent; chip index down 4 percent (Adds details, analyst commentary, updates stock move)

By Manasi Phadke

BANGALORE, Nov 19 (Reuters) - Semiconductor stocks fell sharply after BofA Merrill Lynch turned bearish on the industry and downgraded several chipmakers, including Intel Corp (INTC.O: Quotazione), citing a modest rise in inventories.

Shares of bellwether Intel fell 6 percent to $19.01. Rival AMD AMD.N dropped 5 percent to $6.96.

Other chipmakers followed suit: Nvidia (NVDA.O: Quotazione) dropped 5 percent to $12.87; Micron MU.N was down 7 percent at $6.97; and RF Micro RFMD.O was down 5 percent at $4.42. The Philadelphia Semiconductor Index .SOXX was down 4 percent at 309.37.

The drag on semiconductor chips pulled down the broader U.S. markets -- the Nasdaq Composite Index .IXIC tumbled 1.86 percent, the Dow Jones industrial average .DJI slid 1.27 percent and the Standard & Poor's 500 Index .SPX fell 1.55 percent.

Chip stocks have been rising since the start of the year. Excluding today's losses, Intel has risen 37 percent this year. AMD has risen 239 percent.

The brokerage said a correction was likely, given the rising levels of inventory in the supply chain.   Continua...