After the bell, Microchip maker Intel warned that its fourth-quarter revenue will be sharply lower than it had expected, hurt by poor demand around the world.
The company, seen as a technology bellwether, did not single out the weak global economy, but investors took the numbers to mean the world is on the verge of recession.
This news will probably send ripples through the entire sector, according to CNBC’s Jim Goldman. Intel is such a key player in so many markets that the news is truly dismal.
"It means consumer's have basically shut down for the holidays," adds Charter Equity Research analyst John Dryden. "It's so far below what they had expected....The company had outlined weakness in enterprise but not the consumer yet."
TRADING THURSDAY'S OPEN
"I think the market will open ugly but that could give you a large volume sell-off," says Jeff Macke. "Personally, I think we're nearing selling exhaustion and Intel ought to take us over the edge."
"For a trade, if Intel drops $2 or $3 bucks at the open I think you can get in knowing you're getting out quickly."
"I'd also grab Intel stock but I'd sell some upside calls and hope for a short term rally off the lows," counsels Pete Najarian.
WORST CONSUMER EVER?
Meanwhile, shares of Best Buy plunged on Wednesday after the No. 1 U.S. electronics chain, slashed its profit forecast on Wednesday, the latest sign that the deepening economic crisis may bring a bleak holiday season, sending the company's shares down 7 percent.
People just aren’t buying consumer electronics, says Pete Najarian. They are suffering. It’s obvious or Circuit City would not have gone out of business.
If you're short I would take some back, counsels Karen Finerman. It's the trade to make when it feels the worst.
> Intel Slashes Sales Outlook
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Trader disclosure: On Nov.12, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (SDS), (UUP), (WMT), (MSFT); Najarian Owns (AXP) Put Spread; Najarian Owns (CHK) Call Spread; Najarian Owns (PTIE) Calls; Seymour Owns (AAPL), (BAC), (F), (MER); Seygem Assset Management Is Short (RSX); Finerman's Firm Owns (OIH) Puts; Finerman's Firm Owns (MSFT); Finerman's Firm Is Short (USO), (VNO), (IYR), (IJR), (MDY), (SPY), (IWM), (COF), (BBT,), (GNK); GE Is The Parent Company Of CNBC
CNBC.com with wires