Tech Earnings On Deck, Looking Ugly (AAPL)(GOOG)(MSFT)(INTC)(SAP)

By Douglas A. McIntyre Updated Apr 28, 5:48AM EDT · Published Oct 15, 4:59AM EDT

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Msft Intel (INTC) said it loved its past and hated its future. The Age of Romance must be over. These sentiments are supposed to be the other way around.

The world’s largest chip company said third quarter earnings were up 12%. But Intel CEO Paul Otellini said in a call with analysts that the financial crisis is "creating some signs of stress that may impact our business."

Microsoft’s Steve Ballmer made similar comments two weeks ago. Since he is usually in high spirits, that is an especially bad sign.

In the tech world, the funereal atmosphere is almost everywhere. SAP (SAP), the world’s No.2 enterprise software company, said it would miss its numbers. Analysts have begun talking down Google’s (GOOG) prospects. New Gartner figures show that PC sales growth in the last quarter was only 4.6% in the US. It also appears that sales of cellphones are leveling out which would hurt several handset makers and the companies that supply them chips.

Fools with their silly dreams believed, at least until now, that company IT departments could not do without the latest four-processor chips and virtualization software. Perhaps that is why VMWare (VMW) is down from a 52-week high of $125 to $21.

Even Apple (AAPL) is not immune. It cut the price on its least expensive Mac notebook to $999. A retail trick just like the one that works in the used car industry.

Tech sold off after the furious rally that drove US shares up 11% on Monday. Tech took the markets down more than any other sector. The faithful were driven out of the temples of hardware, software, and e-commerce.

If investors want to see how much the carnage has spread, they only need to look to third quarter earnings at Microsoft (MSFT) and Google. They represent the life of online and IT spending in a tea cup. If both falter when they make their forecasts for the fourth quarter and next year, the correction in technology stocks will become a a full-fledged massacre.That will do the broader market no favors.

If tech is the sector which was to be the belt and suspenders for stocks, the pants are about to drop.

Douglas A. McIntyre

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.