Surging chip stocks boosted the Nasdaq to a solid gain in the stock market today, thanks to earnings beats by Xilinx, Lam Research and Texas Instruments.
XThe Nasdaq rallied 0.7% and the S&P 500 added 0.1%, but the Dow Jones Industrial Average edged 0.1% lower. Small caps fared well with the Russell 2000 rising 0.6%. Volume was higher on both the NYSE and Nasdaq vs. Wednesday, according to preliminary data.
Intel (INTC), up 4%, led the Dow Jones Industrial Average ahead of Q4 earnings due after the close. Shares finished above their 200-day moving average for the first time since Dec. 3. The chip stock, which is trying to clear resistance near the 50 level, is 13% below its early June high. Analysts expect a 13% earnings rise to $1.22 on 11.5% higher revenue of $19.01 billion.
The Philadelphia semiconductor index jumped 6%, fueling similar sharp gains in chip stock ETFs. VanEck Vectors Semiconductor (SMH) and iShares PHLX Semiconductor (SOXX) also surged nearly 6% each.
Among other blue chips, Chevron (CVX) advanced 2% as crude oil prices rose 1%. But ailing health care names weighed: Merck (MRK) and Pfizer (PFE) lost more than 3% apiece, while Johnson & Johnson (JNJ) fell nearly 2%.
Chips, data storage and solar stocks were among the biggest sector gainers in the stock market today. Defensive sectors such as food, tobacco and medical lagged.
It's A Chip Party In Stock Market Today
Xilinx (XLNX) surged 19% to a new high in tremendous volume. Shares gapped up past a 96.28 buy point of a cup base. The chip designer delivered a big fiscal Q3 earnings and sales beat after the close Wednesday. That prompted at least 10 Wall Street analysts to hike their price targets on Xilinx Thursday.
Lam Research (LRCX) led chip gear makers with a 15% jump in heavy trade. The company late Wednesday reported fiscal Q2 results that topped views on both the top and bottom lines. It guided for Q3 earnings of $3.40 a share, above Street forecasts for $3.36 a share. The stock has moved 31% off its Dec. 26 low but is still 31% off its 52-week high.
Other chip gear stocks scoring big gains included Teradyne (TER), up 14%, Applied Materials (AMAT), up 10% and KLA Tencor (KLAC), which leapt 7 %.
Among chipmakers, Texas Instruments (TXN) rallied 7% on a Q4 earnings beat and an upbeat forecast. Sales, however, missed views. Other top-rated chipmakers on the move included Microchip Tech (MCHP) and Analog Devices (ADI), up more than 6% each.
Xilink and Intel led the IBD 50, while Abiomed (ABMD) and Exelixis (EXEL) added about 3% apiece. Semiconductor designer Broadcom (AVGO) also chipped in with a 2% advance.
Despite the big gains, the Innovator IBD 50 ETF (FFTY) climbed 0.3%. TAL Education (TAL), VMware (VMW) and Horizon Pharma (HZNP) underperformed.
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