Intel's Sales Warning Has a Lot To Do With The Strong Dollar--analyst

Susquehanna Financial analyst Chris Caso said the the dollar's rally against the euro is likely a bigger factor in Intel Corp.'s sales warning than implied by the semiconductor maker. Intel said early Thursday that the primary reason for its lowered revenue outlook was weak demand for business desktop PCs. "Since PC components costs are all in dollars (and are priced accordingly in euros), the exceptional euro weakness has caused PC prices to rise dramatically in Europe," Caso wrote in a note to clients. The euro rose 0.7% against the dollar in midday trade, but has lost 15% in the past three months, and closed Wednesday at a near 12-year low. Intel's stock stock was down 4.3%, putting it on course to close at a five-month low. Volume of 60.4 million shares is already more than double the full-day average of 27.4 million shares, according to FactSet.