Tech Stocks Advance Amid Renewed Hope for Recovery
NEW YORK – Stocks advanced on Thursday and computer chip-related shares had a banner day as a hopeful outlook from National Semiconductor Corp. managed to overcome investors' concerns over the battered sector.
Chipmaking bellwether Intel Corp. gained ahead of its mid-quarter report, expected after markets close.
``A bunch of the semi-oriented things are having a very sweet day,'' said Dirk van Dijk, an equity strategist for C.H Dean & Associates, which oversees $1.5 billion. ``People are sensing a bottom in that area.''
Blue chips moved on despite pressure from Philip Morris Cos., whose shares declined after being slapped with a record $3 billion in damages by a California court.
The Dow Jones industrial average ended the day up 20.43 points at 11,090.67, after spending the bulk of the morning in negative territory, while the Nasdaq composite index gained 46.12 points to end at 2,263.85. The broader Standard & Poor's 500 Index rose 6.92 points to 1,276.95.
Semiconductor stocks led the charge higher after a trade group, the Semiconductor Industry Association, said the industry will rebound in the second half of this year, grow 20 percent in 2002 and 25 percent in 2003. The Philadelphia Stock Exchange's Semiconductor index was up 3.62 percent.
National Semiconductor Corp. reported a loss on lower sales, but the chipmaker said there may be signs a recovery is on the horizon, as the company contends with an industry-wide inventory glut. It rose $2.43, or 8.7 percent, to $30.40.
Carreker Corp., which provides software for banks, on Wednesday after the closing bell reported a drop in quarterly earnings but upwardly revised its guidance for 2001. It climbed $3.88 to $15.13.
Intel is expected to give its interim update after the market closes on Thursday, and traders are looking to the leading semiconductor maker to help give clues to the fate of earnings in the high-tech sector. Intel was up $1.18 at $30.99.
``The big news coming in for the day is, 'Does Intel warn, and by how much and how positive are they about the future and inventory issues?','' said Arthur Hogan, chief market analyst at Jefferies & Co. ``The general theme is corporate news, talk about earnings and, more importantly, talk about the future -- when do we start seeing an upturn in business.''
Philip Morris weighed on the Dow index with a drop of $1.47, or 3 percent, to $48.52. A California jury awarded a smoker with incurable cancer record damages and ruled the tobacco giant did not properly warn him of the risks of smoking. Philip Morris said it was optimistic the verdict would be overturned on appeal.
``It's one more nasty shellacking that they are getting,'' said van Dijk. ``It's been relentless.''
The latest reminder of how the economy has slowed came from the Labor Department, which reported new claims for state unemployment insurance shot up last week to a nine-year high, an indication that employers' need for workers is still waning.
Declining issues narrowly outnumbered advancers 8 to 7 on the New York Stock Exchange where volume was 847.22 million shares, compared with 821.75 million at the same point Wednesday.
The Russell 2000 index, which measures the performance of smaller company stocks, advanced 0.91 to 513.49.
Overseas markets were mixed Thursday. Japan's Nikkei stock average and Britain's FT-SE 100 each rose 0.8 percent, and Germany's DAX index advanced 0.3 percent. France's CAC-40 fell 0.8 percent.
--Reuters and the Associated Press contributed to this report.