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Novellus, Oil Prices Send Stocks Soaring

Plunging oil prices and upbeat comments from Novellus and other tech companies sparked a strong rally on Wall Street Wednesday.

Novellus said it expects December quarter earnings of 24-26 cents a share, above analysts' 21-cent estimates, and sales of $325-$330 million, above $321 million forecasts.

Shares of the chip equipment maker gained 5.2% on the day, sending the Philadelphia Semiconductor Index 3.8% higher.

Investors will get another look at the chip sector Thursday night, when Intel holds its mid-quarter update.

The broader market surged on strong personal income and spending and manufacturing and economic activity, and oil prices plunged on rising inventories.

The Nasdaq surged 41 to 2138, the S&P 500 gained 17 to 1191, and the Dow soared 162 to 10,590. Volume rose to 1.77 billion shares on the NYSE, and 2.32 billion on the Nasdaq. Advancers led 23-10 on the NYSE, and 21-10 on the Nasdaq. Upside volume was 79% on the NYSE, and 84% on the Nasdaq. New highs-new lows were 486-3 on the NYSE, and 329-21 on the Nasdaq.

After the close, Synopsis missed estimates, while Ulticom , Comverse and Credence beat estimates.

During the day, Network Appliance surged 6.5% on a positive analyst meeting, and Fairchild Semi and Western Digital jumped on their outlooks.

Amazon , up 1%, said consumer electronics became its largest sales category for the first time.

Omnivision surged 9% after beating estimates.

Analog Devices rose 2% despite an SEC inquiry into stock option grants.

Microchip slipped 2% on a warning.

Cray rebounded 10% after the company placed $65 million in convertible notes.