Dell shares slump after sales growth forecast cut

Shares in Dell have fallen 10.4% after the PC-maker slashed its sales growth forecast late on Tuesday, blaming a "more uncertain demand environment".

Rival firm Hewlett Packard also fell some 3.7% by mid-afternoon in New York in what was otherwise an upbeat market.

Dell said it now only expected revenues to rise 1%-5%, down from 5%-9% before.

This was despite the firm posting net income for the second quarter of $890m (£537m), with net income rising a faster-than-expected 60%.

The increased profits were due in part to Dell's expansion into higher margin businesses, like servers, data storage and computer services.

Revenue was 1% higher, lifted by stronger spending by companies and the US government.

However, Dell is expected to come under pressure during the rest of the year, as governments, companies and consumers are all expected to moderate their spending.

Shares in Dell dropped about 6% in after-hours trading on the weaker sales outlook, after the results were released following the closing bell on Wall Street.

The bad news at Dell failed to weigh down the broader market, which was encouraged by strong financial results from retailers.

Department store Target reported net profits for the second quarter of $704m for the second quarter of the year, comfortably beating expectations.

The firm's shares gave up early gains on Wall Street, to end Wednesday 2.4% higher.

It follows similarly impressive figures on Tuesday from Wal-Mart, the world's biggest retailer, and from DIY chain Home Depot.