Chip stocks posted solid gains on Wednesday even as the rest of the market slumped as traders digested details of the government’s latest bank rescue plan.
Intel (NASDAQ: INTC) powered the chip sector to a 3% gain, rising 2.4% after Barclays analyst Tim Luke said the company is well positioned to weather the downturn. Applied Materials (NASDAQ: AMAT) and AMD (NYSE: AMD) were even stronger, rising 8% and 4.7%, respectively.
But the rest of the market lost 1% on government plans to test the health of banks and fund those that fail, even as bank stocks themselves rose. Fed Chairman Ben Bernanke once again eased concerns that banks might be nationalized, and he also suggested that the SEC might bring back the uptick rule, Depression-era restrictions on shorting that were removed just before the bear market began in July 2007.
Apple (NASDAQ: AAPL) edged higher as its annual shareholder meeting got underway. Research in Motion (NASDAQ: RIMM) rose 2% while Palm (NASDAQ: PALM) shares fell 5%. Apple tacked on 1%.
Dell (NASDAQ: DELL) climbed 1.2% ahead of its quarterly earnings report due out after the close on Thursday.
Analysts are looking for Dell to report earnings of 26 cents a share on an 11% decline in sales to $14.25 billion, according to Thomson Reuters. Dell shares trade at just $8.34, their lowest level since 1997.
Radiant Systems (NASDAQ: RADS) and Answers Corp. (NASDAQ: ANSW) were two big winners, up nearly 20% each.
The Nasdaq lost 16 to 1425, the S&P 500 fell 8 to 764, and the Dow lost 80 to 7270. Volume rose to 8.73 billion shares on the NYSE, and 2.45 billion on the Nasdaq. Decliners led by a 23-15 margin on the NYSE, and 19-8 on the Nasdaq. Downside volume was 66% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 7-259 on the NYSE, and 7-229 on the Nasdaq.