Chip stocks led a stock market rebound on Friday, as investors were relieved by pledges from the Bush Administration to prop up struggling auto companies.
Stocks plunged in early trading after the Senate failed to approve a bailout of automakers, but suggestions from the White House and Treasury Department that they will move to prevent the companies from failing cheered investors, who sent the major stock indexes to gains by the close. Even news of a $50 billion money management fraud couldn’t keep stocks down for long.
The big surprise was that chip stocks led the rebound — even after Gartner said that 2008 will be only the fifth down year in the last quarter-century for chip sales.
Intel (NASDAQ: INTC), Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: BRCM) and Marvell (NASDAQ: MRVL) were some of the names posting gains of 5% or more, well above the Nasdaq’s 2% advance.
Fairchild Semi (NYSE: FCS) surged 13% on lowered guidance and plans for layoffs.
Google (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) led a strong Internet sector, with gains of 5% and 6%, respectively.
Palm (NASDAQ: PALM) soared 29% on reports that the company could announce a new operating system at CES next month. Palm, Research In Motion (NASDAQ: RIMM) and Oracle (NASDAQ: ORCL) will all report quarterly results next Thursday.
SCM Micro (NASDAQ: SCMM) jumped 32% on merger plans.
Flextronics (NASDAQ: FLEX) lost 7.5% on an RBC Capital downgrade.
Silicon Graphics (NYSE: SGI) fell 17% on a restructuring plan.
Agilent (NYSE: A) lost 4% on a Barclays downgrade.
The Nasdaq rose 32 to 1540, the S&P added 6 to 879, and the Dow rose 64 to 8629. Volume declined to 6.03 billion shares on the NYSE, and 1.92 billion on the Nasdaq. Advancers led by a 22-15 margin on the NYSE, and 19-9 on the Nasdaq. Upside volume was 70% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 9-149 on the NYSE, and 2-118 on the Nasdaq.