Mellanox Technologies Ltd fell in New York to trade at the biggest discount to the Tel Aviv shares on record as Stifel Nicolaus & Co cut the recommendation on the technology stock while Intel Corp reduced its sales forecast. 

The maker of technology used to transfer and store data plunged 7.6 percent to $110.85 in New York, extending its discount to the Tel Aviv stock to $9.60. Mellanox led declines in the Bloomberg Israel-US Equity Index of the most traded Israeli companies in New York, which retreated 0.3 percent to 85.15. The measure gained 1.2 percent last week. 

Stifel cut its recommendation on Mellanox to hold from buy, saying the Yokneam Elit, Israel-based company may see slower demand for its products. The current price reflects a fair valuation, it said. Intel Corp, the world's largest semiconductor maker, reduced its third-quarter sales forecast, citing declining demand for personal computers from corporate customers in a weakening economy. 

"The big move is because of the compounding effect of the Stifel downgrade and news from Intel," Brian Freed, an analyst at Wunderlich Securities Inc, said by phone from Denver on Sept 7. "Intel is a bellwether in the semiconductor industry and you probably have people wanting to trim their exposure in the sector." 

Israel's TA-25 benchmark index fell 0.7 percent to 1112.57 last week in Tel Aviv. The gauge, which trades at 10.5 times estimated earnings, dropped for the first time in three weeks. Companies listed on the Bloomberg Israel-US Index trade at an average valuation of 12.8 times estimated earnings. 

Mellanox has surged 241 percent this year, the most on the Israel-US Index, having more than tripled its market capitalization to $4.4 billion. The company's reported revenue beat analysts' estimates in each quarter since it went public in 2007. Mellanox closed at a record high of $119.93 on Sept 6. 

Mellanox has benefited from demand for its InfiniBand technology, which is used in high-end computing and data centers. Santa Clara, California-based Intel made two acquisitions of competing technologies earlier this year. 

Intel agreed to buy QLogic Corp.'s InfiniBand business for $125 million on Jan 23 and in April said it will spend $140 million to acquire Cray Inc's technology to connect server chips. 

Sales in the third quarter will reach $12.9 billion to $13.5 billion, down from a prior projection of $13.8 billion to $14.8 billion, Intel said in a Sept 7 statement. Analysts had estimated sales of $14.2 billion on average, according to data compiled by Bloomberg.