Intel's Earnings Not So Chipper

Revenue slightly lower, profit down sharply; oil drops again

Even though the Dow powered ahead to a new record close (12,582.59), shares of one component are likely to push the index lower when trading resumes on Wednesday.

Intel (INTC), a bellwether for technology, reported disappointing 4th quarter earnings after the close. The company disclosed earnings of $1.5 billion or .26 cents per share as opposed to $2.45 billion and 40 cents for the same period a year ago. Shares sold off nearly a full point in after-hours trading and the damage is not expected to be fully felt until at least the end of the current quarter.

Intel has been locked into a fierce price war with Advance Micro Devices (AMD) for well over a year, though some analysts believe it could be coming to an end as Intel has recently introduced newer chips with which AMD cannot compete.

The chip market has been very competitive, however, and Intel, the world's largest chip-maker, has been dealt much of the pain. The company is in the process of eliminating more than 10,000 jobs in a restructuring effort and is selling off or streamlining other parts of its operations.

As chips fall, consumers gain. Prices for laptops, desktops and other computer products have been driven down thanks to lower and lower costs for faster processing speeds.

In other market-shaking news, oil tumbled once again, with light sweet crude closing at $51.21 a barrel, a 19-month low. Warm weather has diminished the need for home heating oil this winter and reserves are at or near record seasonal levels. Lower prices for oil is generally seen as good news, and this was good enough to keep the rally alive another day.