A lousy way to start off the week on Wall Street. Stocks were down 250 points by 1 PM Monday, mostly from downbeat earnings expectations from financial giant AIG. Adding fuel to the fire was a modest spike in oil prices (to $115 per barrel) mostly due the onslaught of the hurricane season and uncertainties about the health of Georgia’s oil supplies after its wrestling match with Russia.

Some good news? Housing sales were up 3.1% last month – way better than real estate analysts had expected and gasoline prices have fallen significantly (down to $3.40 a gallon in bucolic Bucks County, Penn. Where I live). Gas prices here were $4.15 a gallon only six weeks ago.

On the tech front, Advanced Micro Devices needs cash and it’s selling its digital TV chip division to Broadcom to get it. The $193 million deal has triggered the usual blather about refocusing on core operations for AMD, but the company is way behind Intel in chip sales and needs some liquidity to stay competitive. Plus, the digital TV unit was a downer for AMD.

Dirk Meyer, AMD’s newly minted president and chief executive, said the sale will make the chipmaker "leaner and more focused while seeking to create a business model to deliver sustainable profitability," He also said it will lower the amount of revenue the company needs to break even.

For its part, Broadcom can now claim to offer the market a complete line of digital TV products, this in advance of an FCC decree that all US televisions go digital later this year.

Zacks senior semiconductor industry analyst Abdul Saleh has more on Broadcom and tech stocks. He says that global growth for semiconductors outside the US is at 30% or 40% right now. His favorites right now are Broadcom and LSI.

“For Broadcom, margins are expected to remain under pressure due to the ramp up of new products and increase in operating expenses to the tune of $15-$20 million. BRCM expects moderate growth in broadband communications, driven by a seasonal pick-up in the blue ray and digital TV product lines. Growth in the traditional wireline business is expected to slow down in the second half of the year. We maintain our Hold rating and target price of $24.”

“In LSI's case, the revenue drivers from the new technologies acquired in LSI's buyout of Agere Systems as well as an acquisition deal with Infineon recently are coming through, but will become more meaningful in the late-2008/early-2009 time frame when share gains in the hard disk-drive (HDD) space begin to accelerate, based on recent design wins. Until then, headwinds from a deteriorating macroeconomic environment remain a significant risk for the story. LSI also remains a Hold for us currently.”

With opportunities for profits in overseas bourses, especially China, the tech market (especially semiconductors) is looking good for the rest of 2008 and for 2009. The key is locating companies that do a lot of business in hot economies like China. Intel fits the bill. If Saleh is right, a few others are in the mix now, too.