Semis Strike Back
Following Wednesday’s chip-led meltdown, stocks were able to rally Thursday
after Merrill Lynch made favorable comments about the semiconductor sector.
After trading in the red for most of the morning, the Nasdaq turned around at
mid-day and worked its way skyward to finish up 2.5%, near its high of the day.
The S&P 500 added 0.7% while the Dow ended up flat.
Nasdaq volume picked up by about 12% over Wednesday’s level as 1.5 billion
shares changed hands. The NYSE saw volume ease by about 5% to 947 million
shares.
The tech rally came on the heels of strong economic news, as new jobless
claims fell 12,000 for the week to 296,000 while analysts had expected 301,000.
In addition, factory orders for May posted a 4.1% increase, topping the 3.7% increase
analysts expected. Stocks were able, however, to shrug off inflationary concerns enough to
enjoy a nice summer rally.
“As we wrote last week, and also repeated Wednesday, the best thing
occurring in technology land is that the Nasdaq is above its upward sloping 50-
and 200-day moving averages and the number of new highs is improving
slowly,” said John Roque, Vice President, Arnhold and S. Bleichroeder.
According to preliminary numbers, the Nasdaq gained 97.24 to 3960.34, the Dow
eased 2.13 to 10,481.47, and the S&P added 10.44 to 1456.67.
Top-performing sectors included semiconductors
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software
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retailers
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On the downside were forest and paper products
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drugs
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chemicals
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Semis that thumbed their noses at Salomon Smith Barney’s Wednesday call
included Altera
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Novellus
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Intel
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Other Dow winners included Microsoft
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Depot
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5/16. Dow losers included IBM
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respectively.
Merrill Lynch
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strong broker/dealer group. Also posting solid gains were Lehman Brothers
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up 3 1/2 to 96 3/4 and Morgan Stanley Dean Witter
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Software winners included Symantec
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up 6%, Electronic Arts
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Looking ahead, the much anticipated June employment report will be released at 8:30 AM ET on Friday.
Estimates look for 286,000 new jobs created, a 4.0% unemployment rate, and a
0.4% increase in average hourly earnings.