TI Sees Strong Quarter

It’s been a tough year for the chip sector, with the Philadelphia Semiconductor Index off 8% despite a 12% gain in the Nasdaq, but Texas Instruments offered the sector a little hope late Monday when it raised its financial guidance for the current quarter.

TI said it expects fourth-quarter sales of $3.5-$3.66 billion, at the high end of its previous forecast and potentially above the Wall Street consensus estimate of $3.56 billion, according to Thomson Financial. TI reported sales of $3.46 billion in the year-ago quarter.

The chip maker also said it expects earnings per share of 50 to 54 cents, compared to 51-cent estimates.

TI cited better than expected wireless sales for its new guidance range. The company’s shares gained more than 4% in after-hours trading.

Stocks rose during Monday’s trading session as investors continued to bet that the Federal Reserve will cut interest rates once again when it meets on Tuesday. Fed funds futures traders believe the Fed is likely to cut rates by 25 basis points to help steady the troubled credit markets, although some traders held out hope for a 50-basis point rate cut.

Chips were strong ahead of TI’s mid-quarter update, with Novellus up 4%.

VMware and Oracle were strong, up 5% and 2.4%, respectively, while Yahoo and Amazon lost about 1.5% each.

Trident Micro, Learning Tree and Red Hat fell on downgrades.

Overstock plunged 21% on aggressive discounting that fueled margin concerns.

The Nasdaq rose 12 to 2718, the S&P gained 11 to 1515, and the Dow climbed 101 to 13,727. Volume declined to 2.89 billion shares on the NYSE, and 1.82 billion on the Nasdaq. Advancers led by a 21-11 margin on the NYSE, while decliners held a 16-13 edge on the Nasdaq. Upside volume was 73% on the NYSE, and 64% on the Nasdaq. New highs-new lows were 120-80 on the NYSE, and 105-103 on the Nasdaq.

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