"Intel third quarter to be below expectations" published on www.intc.com last week has since echoed ominously throughout the Nasdaq.
Since last week's announcement of lower-than-expected Q3 earnings, Intel stock has taken a tumble and sent Nasdaq tech stocks into a spin.
Networking equipment vendor 3Com's reported net loss of $US41.4 million only added fuel to the fire as the market lost confidence in over-valued IT companies.
Intel shares plummeted after the initial announcement, with the stock price falling more than 19 per cent to $51.00 shortly after the Nasdaq opened trading. Intel continued to be hot property, with more than 80 million shares traded on Thursday, September 28 alone. The downward trend continued with the stock ending the week hovering in the low 40s, at the end of the week.
Cisco, Microsoft, Dell, 3Com and Yahoo! all lost ground as hundreds of millions of shares changed hands. Unable to balance the pressure of several high profile stocks in turmoil, the Nasdaq has fallen steadily over five consecutive days at print time.
At this stage, it appears that the ASX is not following suit. Prices are remaining buoyant despite US volatility.
Australian commentators are surprisingly calm about events in the US. David Rees, head of research at Commonwealth Bank of Australia's research arm Commonwealth Research, attributes the falls on the Nasdaq to overvalued shares and exaggerated profit expectations.
"The fall reflects the fact that in the short term, those profit expectations aren't being realised as Q4 results come in," Rees said.
Fortunately, Australian punters have been largely unaffected by the Nasdaq slump.
"Prices on the Australian market reflect a fair market value, so the ASX has remained steady over the past week while the US market has been falling steadily," Rees said.