Chips Stocks Pace Market Turnaround

Stocks turned steep losses into solid gains by Wednesday’s close on a pair of chip sector upgrades.

AMD and Nvidia gained nearly 8% each on positive comments from Stifel Nicolaus and Lehman Brothers, respectively, and Nvidia also benefited from an upbeat analyst day and a new high-end graphics chip. Stifel Nicolaus analyst Cody Acree said AMD shares could benefit from a stronger second half.

Symantec and Sybase also benefited from analyst upgrades.

Tollgrade lost 5% on a warning.

Investors once again got mixed signals on inflation, with bond yields rising but oil prices backing off their highs. After an early sell-off in stocks, falling oil prices encouraged dip buyers.

The good news for the tech sector continued after the bell, when Jabil jumped on better than expected results.

The Nasdaq gained 17 to 2617, the S&P 500 rose 9 to 1522, and the Dow gained 56 to 13,545. Volume declined to 3.16 billion shares on the NYSE, but rose to 2.08 billion on the Nasdaq. Advancing issues led by a 17-14 margin on the NYSE, and 15-14 on the Nasdaq. Upside volume was 72% on the NYSE, and 75% on the Nasdaq. New highs-new lows were 108-89 on the NYSE, and 101-92 on the Nasdaq.

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