SOX Rocks On AMAT Upgrade

Chip stocks posted strong gains Wednesday despite a warning from Applied Materials .

The reason? Comments from CIBC that rising bookings at the chip equipment giant mean that better results lie ahead. CIBC said AMAT could gain 50% by year-end.

Applied Materials gained 3% on the comments, and the SOX, the semiconductor index, gained 2%.

The broader market slipped despite better than expected retail sales.

The Nasdaq slipped half a point to 1686, the S&P 500 declined 6 to 984, and the Dow lost 38 to 9271. Volume rose to 1.2 billion shares on the NYSE, and 1.45 billion on the Nasdaq. Decliners led 18-14 on the NYSE, but advancers led 16-15 on the Nasdaq. Upside volume was 44% on the NYSE, and 52% on the Nasdaq. New highs-new lows were 159-28 on the NYSE, and 144-11 on the Nasdaq.

After the close, Brocade matched estimates.

During the day, Computer Sciences fell 7% on a Goldman Sachs valuation downgrade after reporting in-line results. Aether Systems gained 5% and eSpeed surged 11% after beating estimates.

Dell , off 1.4%, reports results Thursday.

ADC Telecom fell 4% after losing its CEO to MCI.

PeopleSoft fell 2% after making more claims in its attempt to avert an Oracle takeover.

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