Stocks Snap Back

Stocks soared Friday as bond yields stabilized on soothing words from a Federal Reserve official. Chip stocks led the way higher on stellar results from National Semi .

Stocks had fallen for three straight days on inflation and interest rate fears, but comments by Chicago Fed President Michael Moskow that inflation remains contained helped stabilize bond prices and sent stocks soaring.

National Semi rocketed 15% after beating earnings forecasts and announcing a $2 billion stock buyback. The chip sector gained 3% on the day.

The IPO of photonic chip company Infinera continued to get a warm welcome, jumping 27% after rising 52% in its debut Thursday. Limelight Networks was another strong IPO.

TD Ameritrade continued to gain on takeover pressure from investors.

Quality Systems fell on its results, and Tellabs lost ground on a Goldman Sachs downgrade.

Openwave fell on a restructuring plan as the company continues to fend off takeover efforts.

The Nasdaq surged 32 to 2573, the S&P 500 gained 17 to 1507, and the Dow rose 157 to 13,424. Volume declined to 2.97 billion shares on the NYSE, and 1.99 billion on the Nasdaq. Advancing issues led by a 22-10 margin on the NYSE, and 20-9 on the Nasdaq. Upside volume was 86% on the NYSE, and 83% on the Nasdaq. New highs-new lows were 37-96 on the NYSE, and 71-64 on the Nasdaq.