Chip Upgrade Sparks Rally

A Goldman Sachs upgrade of the chip sector sent stocks surging on Wednesday, ending an eight-day losing streak for the Nasdaq and powering blue chips to their best gains in more than a month.

Goldman Sachs analyst James Covello raised Intel to outperform and upped his ratings on a number of other chip companies. While Covello expects more bad news from Intel and the rest of the sector in the weeks ahead, he said valuations have become more reasonable.

Boeing led the broader market higher on troubles at rival Airbus, despite a core consumer inflation reading that was stronger than expected, all but guaranteeing another Federal Reserve rate hike at the end of the month.

The Nasdaq rose 13 to 2086, the S&P 500 climbed 6 to 1230, and the Dow surged 110 to 10,816. Volume declined to 2.66 billion shares on the NYSE, and 2.14 billion on the Nasdaq. Advancers led 17-15 on the NYSE, and 16-14 on the Nasdaq. Upside volume was 66% on the NYSE, and 69% on the Nasdaq. New highs-new lows were 15-266 on the NYSE, and 28-236 on the Nasdaq.

Apple slipped on a patent spat with Creative Technology .

E*Trade fell 6% as the market decline took a toll on client accounts.

News Around the Web