Consumer economic data boosts tech stocks, blue chips
BEST 1-DAY GAIN FOR CHIP MAKERS IN 10 MONTHS
Tech stocks climbed Thursday, led by chip companies, as investors welcomed inflationfriendly economic data. The technology-heavy Nasdaq composite index surged 34.35, or 1.5 percent, to 2,267.17.
Silicon Valley’s largest tech stocks by market value were mostly higher. Intel, Google, Cisco Systems, Oracle, eBay, Apple Computer, Yahoo, Applied Materials and Gilead Sciences gained. HewlettPackard declined.
The Dow Jones industrial average rose 106.70, or 1 percent, to 10,912.57. The Standard & Poor’s 500 index added 15.19, or 1.2 percent, to 1,264.67.
Investors were heartened by a finding in the Commerce Department’s personal income and spending report showing scant inflationary pressures. And with incomes rising 0.4 percent and spending rising 0.2 percent, the market felt consumers could be well positioned for a strong holiday shopping season, while lower prices could bring an end to the Federal Reserve’s interest rate hikes.
The news was enough to overcome some mixed retail sales reports. It also brought newfound confidence to investors, who piled into small-cap, riskier stocks as enthusiasm over a stop to interest rate increases grew.
‘‘Investors have their rally caps on for year-end, and we’re doing it with speculation,’’ said Jack Ablin, chief investment officer at Harris Private Bank.
Santa Clara chip maker Intel rose 50 cents, or 1.9 percent, to $27.18 after analysts at Bear Stearns said the company is likely to raise its fourthquarter revenue outlook when it provides a mid-quarter update next week. That helped semiconductor stocks put in their best one-day gain in nearly 10 months, with the Philadelphia semiconductor index surging 4.2 percent.
National Semiconductor, a Santa Clara maker of chips that boost battery life in mobile phones, advanced $2.02, or 7.8 percent, to $27.90.
Calpine was down 13 cents, or 25.5 percent, to close at 38 cents. The struggling San Jose power merchant was removed from the Standard & Poor’s 500 index after the close of trading, prompting index funds to sell the stock.
JDS Uniphase gained 23 cents, or 9 percent, to $2.80. The San Jose maker of parts for fiber-optic networks and other tech products gained for a second day after it was rated ‘‘in-line’’ in new coverage by Goldman Sachs analyst Brantley Thompson, who praised the company’s cost-cutting moves.
San Francisco retail giant Gap saw a 4 percent decline November in same-store sales as traffic remained ‘‘challenging’’ at its Gap and Banana Republic chains. However, the company said traffic trends improved at its Old Navy stores. The stock ended up 2 cents at $17.40.
Bond prices edged lower, with the yield on the 10- year Treasury note rising to 4.52 percent from 4.50 percent late Thursday. The dollar was higher against other major currencies, while gold prices rose above $500 an ounce to new 18- year highs. The Associated Press, MarketWatch and Bloomberg News contributed to this report.