Chip Stocks Gain on Recovery Hopes

Chip stocks rose Wednesday on growing hopes for an economic recovery, but the rest of the market remained stalled.

Intel (NASDAQ: INTC), AMD (NYSE: AMD) and Rambus (NASDAQ: RMBS) were some of the day’s gainers on a better than expected government durable orders report and a Gartner report citing improving conditions for the chip sector.

Stifel Nicolaus analyst Aaron Rakers noted that the durable orders report showed computers, electronics and communications equipment stabilizing, with some sectors even showing improvement in orders on a month-to-month basis.

Palm (NASDAQ: PALM), EMC (NYSE: EMC) and VMware (NYSE: VMW) rose more than 3 percent each. Palm gained on a Macquarie Research report predicting a new phone and additional carrier business, while EMC and VMware climbed on speculation of a deal with Cisco (NASDAQ: CSCO) at next week’s VMworld show.

Dell (NASDAQ: DELL) edged higher ahead of its quarterly earnings report due out after the market close on Thursday. Analysts are looking for earnings of 23 cents a share from Dell on a 23.4 percent decline in sales to $12.58 billion, according to Thomson Reuters.

Vonage (NYSE: VG) soared on hopes that Google’s (NASDAQ: GOOG) new Voice application could boost business.

The Nasdaq was up a fraction to 2024, the S&P 500 added a fraction to 1028, and the Dow rose 4 to 9543. Volume declined to 5.08 billion shares on the NYSE, but rose to 2.09 billion on the Nasdaq. Decliners led by a 19-17 margin on the NYSE, while advancers led 14-12 on the Nasdaq. Upside volume was 45 percent on the NYSE, and 53 percent on the Nasdaq. New highs-new lows were 108-37 on the NYSE, and 66-8 on the Nasdaq.