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Stocks Rise on Chip Forecasts

May 10, 2003|From Times Staff and Wire Reports

Stocks rallied Friday, with the S&P 500 and Nasdaq chalking up their first four-week winning streak since October, as forecasts from Nvidia and Intel lured investors back to the market after a two-day slump.

"The Nvidia news was pretty good for the chip makers, and there's sort of a general upward trend," said Rick Meckler, president of LibertyView. "It's a combination of still-positive feelings over the end of the war and the fact that earnings season held no real disappointments."

The Dow Jones industrials finished up 113.38 points, or 1.3%, at 8,604.60. It was the highest close since Jan. 16.

The broader Standard & Poor's 500 index added 13.14 points, or 1.4%, to 933.41. The technology-laden Nasdaq composite index rallied 30.46 points, or 2%, to 1,520.15.

Winners trounced losers by 3 to 1 on the New York Stock Exchange and by more than 2 to 1 on Nasdaq, though trading declined from recent levels.

For the week, the S&P 500 gained 0.4%, the Dow added 0.3% and Nasdaq advanced 1.2%. For the S&P 500 and Nasdaq, this marked their fourth straight week of gains for the first time since October.

Stocks extended gains Friday after Treasury Secretary John W. Snow said he sees no risk of significant deflation in the U.S. His remarks helped ease concerns after the Federal Reserve warned Tuesday that an "unwelcome substantial fall in inflation" could lead to more economic weakness.

Nvidia shares soared 33%. On Thursday, the graphics chip designer reported a smaller profit and lower revenue in its fiscal first quarter but forecast that revenue would rise sharply in the current quarter. Nvidia ended up $5.31 to $21.37, topping Nasdaq's most active stocks.

Intel, the No. 1 computer chip maker, ended up 71 cents at $19.58. Intel President Paul Otellini said he expects the semiconductor industry to recover this year, German financial daily Handelsblatt reported Friday.

The S&P 500's semiconductor index is up 29% this year on optimism purchases will pick up in the second half of 2003. Last year, the index slumped 51% as consumers and corporations bought fewer computers or opted for cheaper models as economic growth slowed.

In commodity trading, oil rose for a third day after the U.S. Army pushed back its estimate of when Iraqi oil will return to the market by at least six months. June crude futures gained 74 cents to $27.72 a barrel in New York trading.

Treasury bond yields were mostly flat after sinking earlier in the week. The battered dollar also was little changed.

In other highlights:

* Coca Cola rose $1.11 to $43.99. It was upgraded by Bear Stearns to "outperform" from "peer perform." The brokerage cited an improved long-term business model.

* ImClone Systems sank $1.21 to $19.63. ImClone's auditors are insisting on a broad review of its finances, raising concern the biotechnology firm won't be able to file its 2002 annual report before a May 15 stock delisting hearing.

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