Chip stocks return to strength after Intel update
<< 4 June 2004, 11:42am ET
By Daniel Sorid
SAN FRANCISCO, June 4 (Reuters) - A flashy forecast from Intel Corp. (NASDAQ:INTC), which said sales of flash memory were unexpectedly strong, lifted depressed semiconductor stocks on Friday.
All 18 companies that make up the Philadelphia Stock Exchange semiconductor index (INDEX:SOX.X) rose in morning trade, with the index as a whole up 2.2 percent. Before Friday, the index had fallen 5 percent this week.
Intel helped lead the charge, rising 93 cents, or 3.4 percent on Nasdaq. Following closely were Altera Corp. (NASDAQ:ALTR), a maker of programmable microchips, and Texas Instruments Inc. (NYSE:TXN), the world's largest maker of cellular phone chips.
Micron Technology Inc. (NYSE:MU), a maker of memory chips, rose 51 cents, or 3.6 percent.
Semiconductor shares rose 70 percent last year, on average, but have fallen about 15 percent from January highs.
Until Friday, chip stocks had suffered from concerns about rising oil prices and the impact on the global economy. Several chip companies issued business updates that kept with earlier forecasts, but most saw their stocks fall subsequently as investors demanded more.
A case in point was Fairchild Semiconductor International Inc. (NYSE:FCS), which makes a range of chips used in computers and electronics.
The South Portland, Maine-based company on Wednesday stood by its earlier forecast, but its shares fell 7 percent as Wall Street fretted over a comment about potential "volatility" in its order book.
Another chip maker, Xilinx Inc. (NASDAQ:XLNX), fell 4 percent on Wednesday after telling investors that business was on track with prior expectations.
Intel's forecast on Thursday, which raised the mid-point of its revenue target by $200 million to $8.1 billion, was received well by analysts, many of whom had been expecting Intel to keep its financial target steady.
"Given expectations for no change ... we would expect Intel's revision to refuel the recent rally in INTC (Intel) and the (semiconductor index)," Citigroup Smith Barney analyst Glen Yeung wrote in a note to clients. >> |
