US stocks: Markets rise; industrial and chip shares rally

US stocks rose Thursday with energy companies getting a lift from a four-month high in crude oil prices, while market talk of an imminent broker upgrade for the semiconductor sector boosted tech shares.

Crude stayed firmly above US$51 a barrel, fueling shares of oil majors ExxonMobil Corp., ConocoPhillips and ChevronTexaco Corp.

Nasdaq was helped by cell phone chip-maker Qualcomm Inc., which jumped 4 per cent to US$35.51, and the world's biggest semiconductor maker Intel Corp. climbed 1.7 per cent to US$23.70.

Industrial stocks also gained after mining equipment maker Joy Global Inc. posted better-than-expected first-quarter earnings and lifted its 2005 earnings outlook.

Joy Global rose 18.4 per cent to US$35 and Caterpillar Inc. was the biggest gainer on the blue-chip Dow, rising 3 per cent to US$93.16.

The Dow Jones industrial average closed up 75 points, or 0.70 per cent, at 10,748.79. The Standard & Poor's 500 Index was up 9.40 points, or 0.79 per cent, at 1,200.20. The technology-laced Nasdaq Composite Index rose 20.45 points, or 1.01 per cent, to 2,051.70.

Oil prices rose on expectations of continuing cold weather in the United States. US crude oil futures ended higher despite the latest government data showing stocks rose last week.

Crude for April delivery traded up 22 cents at US$51.39 a barrel after soaring to US$52.05, the highest level since the Nov. 1 peak of US$52.50.

Some traders said markets were relieved oil prices did not go even higher. Rising oil prices lift shares of energy companies but also raise concerns that higher energy costs will pinch most companies' profits and curb consumer spending.

"I think you are seeing a little bit of a relief rally, " said Jim Fehrenbach, head of Nasdaq trading at Piper Jaffray, Minneapolis.

Exxon rose 2.9 per cent to US$61.13. ConocoPhillips edged up US$2.98, or 2.8 per cent, to US$110.18 and ChevronTexaco gained US$1 to end at US$61.16.

Fehrenbach and other investors said market rumors of an imminent broker upgrade for semiconductor stocks helped technology shares rally.

Trading in stocks was active, with 1.51 billion shares changing hands on the New York Stock Exchange, above last year's daily average of 1.46 billion. About 2.03 billion shares were traded on Nasdaq, above last year's 1.81 billion daily average.

Advancers outnumbered decliners by about 2-to-1 on the NYSE and by about 19-to-12 on Nasdaq.

Search engine companies Google Inc. and Yahoo Inc. fell after RBC Capital Markets reduced its ratings on the companies. Google fell 2.6 per cent to US$188.89 and Yahoo slipped 2 per cent to US$31.48.

Michael Bee, lead equity strategist for Boyd Watterson Asset Management LLC, said, "These companies are selling at lofty valuations and from a fundamental approach seem to be overpriced and will continue to be volatile stocks. "

Media conglomerate Viacom Inc. fell 2 per cent to US$35 after it posted a huge loss on US$18 billion in asset write-downs. The results before the charges exceeded Wall Street estimates but the company offered a cautious outlook.

Qwest Communications International Inc. rose 3.7 per cent to US$4.20 after sources familiar with the situation said it is planning to revise its US$8 billion bid for MCI Inc. either on Thursday or Friday and include a greater portion of cash than in the original offer. MCI was up 1.1 per cent at US$23.21.

In economic news, the number of new claims for US jobless benefits climbed more than expected to 312,000 last week, government data showed.

In another report, new orders for long-lasting manufactured goods fell 0.9 per cent last month as demand for autos and civilian aircraft fell, but businesses boosted orders for capital goods, the government said.

- REUTERS