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US stocks buoyed by tech shares

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CIOL Bureau
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Elizabeth Lazarowitz

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NEW YORK: Blue-chip stocks edged higher in late afternoon trading on Thursday

as investors anxiously awaited Friday's US jobs data for clues to the Federal

Reserve's next move on interest rates.

Technology shares, meanwhile, jumped amid gains in the semiconductor sector,

which had been severely beaten on Wednesday following a bearish report on the

sector by a brokerage house.

"Trading remains very thin, very volatile and the market is subject to

these swings at this point," said Avatar Associates president Charles

White. "I think everything is meandering around with people getting set up

and comfortable for the number tomorrow."

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Analysts expect the report, closely watched by the Fed as a gauge of wage

inflation, to show continued tightness in the labor market, which some fear

could prompt another Fed rate hike.

The blue-chip Dow Jones industrial average .DJI) swung out of negative

territory, where it had languished for much of the session, underpinned by gains

in semiconductor giant Intel Corp. and financial stocks. The Dow rose 4.86

points, or 0.05 per cent, to 10,488.46.

Meanwhile, gains in semiconductor shares also helped the Nasdaq composite

index .IXIC) as it rallied 77 points, or 2 per cent, to 3,940.

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Intel, the world's No. 1 chipmaker, climbed 3-7/16 to 135-1/16, while

semiconductor equipment maker Applied Materials gained 2-12/16 to 86-3/16. The

Philadelphia Stock Exchange's semiconductor index .SOXX) rose 3.51 per cent

after dropping 9.32 per cent on Wednesday.

"There's a little bit of bargain-hunting in the technology sector,"

said Edward Jones chief market strategist Alan Skrainka adding that Wall Street

was beginning to rethink Wednesday's harsh reaction to the chipmaker downgrades.

On Thursday, analysts defended the semiconductor industry, saying that its

growth cycle is not over yet.

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But all was not rosy for technology shares.

Declines in rival computer makers International Business Machines Corp., off

3 at 101, and Hewlett-Packard Co., off 1-7/16 at 118-3/16 were weighing on the

Dow. Both stocks are among the 30 in the Dow average.

The Dow had a few bright spots, including financial shares such as JP Morgan,

which rose 1-9/16 to 116-7/8 and oil giant Exxon Mobil.

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Exxon rose 1-11/16 to 78-5/8 after tumbling in the previous session when oil

prices slumped on the prospect of increased production by Saudi Arabia.

Earlier in the session, the Dow fell after another batch of corporate profit

warnings sent fresh tremors through Wall Street, which is already worried that

the second-quarter earnings reporting season beginning next week, might not be

as good as expected.

Investors were on edge ahead of a monthly US employment report that many hope

will give clues as to the Fed's next move on interest rates.

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The June labor report is expected to show the jobs market tightened compared

with May and that average hourly wages rose at a faster pace. "I think the

market is clearly treading water ahead of the (jobs) report that is going to be

released tomorrow," said State Street Global Advisors, Boston, chief

investment strategist.

"The market is torn between believing that the technology story is

viable long-term and the fact that there are some cracks developing, especially

in second-and third-tier tech companies," he said.

On the New York Stock Exchange, advancers were beating decliners 1,467 to

1,360 with 746,349,150 shares changing hands.

On the Nasdaq, decliners were beating advances 2,028 to 1,828 with

1,150,057,073 shares changing hands.

(C) Reuters Limited 2000.

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