Intel (NasdaqGS: INTC) cutting its fourth-quarter outlook on Monday further damaged technology sector exchange traded funds that were already drained by Eurozone debt fears.
Intel is the fifth-largest holding in PowerShares QQQ (NasdaqGM: QQQ) at 5.2% of the ETF, which tracks the Nasdaq-100.
According to a Morningstar research note, Intel lowered its fourth quarter projection Monday due to diminished near-term microprocessor demand as a result of hard drive supply constraints, notably from typhoon flooding in the industrial parks of Thailand. The shortage of HDDs is limiting the number of new PCs produced, which reduces the demand for microprocessors.
Intel now estimates lower-than-expected revenue of $13.4 billion to $14 billion, compared to its previous $14.2 billion to $15.2 billion expectation.
The company expects the supply shortage to continue into the first quarter, but demand for microprocessors from PC manufacturers should recover in the first half of 2012.