One sign of tough conditions for hardware was Monday's announcement from electronics retailer Circuit City that it had filed for bankruptcy protection to try to turn around its bleak financial position.

The PC industry is under increasing scrutiny after Intel cut its fourth-quarter guidance Wednesday. Intel now expects revenue for the current quarter of about $9 billion, down from its earlier forecast of $10.1 billion, citing "significantly weaker-than-expected demand in all geographies and market segments." That would amount to the worst fourth-quarter sales decline in the company's history.

Intel's announcement gave Asian markets a shock, leading to a broad sell-off in regional markets that included a 5.3 percent drop in Tokyo and a 5.2 percent decline in Hong Kong. The international scene darkened further with the announcement Thursday that the German economy shrank over the past three months. Earlier in the week in Europe, mobile-phone vendor Vodafone Group reported a 35 percent decline in first-half net income and cautioned that full-year sales would fall short of earlier expectations.

On the networking front, Nortel on Monday reported a net loss of $3.4 billion for the third quarter and said it would slash 1,300 jobs.

Citigroup on Thursday reduced its U.S. and global PC unit shipment forecast from a decline of 3 percent and an increase of 5 percent, respectively, to a decline of 10 percent and a decline of 3 percent. "We still expect notebook shipments to grow 15 percent globally in 2009 thanks to Netbooks, but we expect this to be offset by a 21 percent decline in desktop shipments," according to a note from Citigroup analyst Richard Gardner.