US stocks: Prices end higher on Apple, chips' strength

NEW YORK - US stocks rose on Friday, with the Dow and S&P carving out 2005 highs as the mood toward technology brightened, helped by Apple Computer Inc.'s announcement of a stock split.

Semiconductor stocks, including Intel Corp. and Applied Materials Inc., rose, boosted by the idea that the sector is ripe for a rebound.

The Dow Jones industrial average turned positive for 2005 for the first time, edging up 0.12 per cent for the year so far, but the Nasdaq Composite and the S&P 500 remain negative.

The Dow Jones industrial average was up 50.24 points, or 0.47 per cent, at 10,799.85. The Standard & Poor's 500 Index was up 8.76 points, or 0.73 per cent, at 1,205.77. The Nasdaq Composite Index was up 23.59 points, or 1.15 per cent, at 2,076.69.

For the week, the Dow rose 0.75 per cent and the S&P 500 was up 0.20 per cent, marking their third straight week of gains, while the Nasdaq was down 0.48 per cent.

Stocks have been gaining ground following a weak start to the year, although the rally paused for breath earlier this week.

"It's a very impressive rally and a very broad advance, " said Al Goldman, chief market strategist at A.G. Edwards.

"The Nasdaq is soaring, led by the hi-techs. After a few days of R&R, to have this type of strength is impressive, particularly coming before the weekend, with no particular great new fundamental news. It's an impressive day and I'd look for it to carry forward over the near term. "

Trading was active, with 1.56 billion shares changing hands on the New York Stock Exchange, above the 1.46 billion daily average for last year. About 2.17 billion shares were traded on Nasdaq, above the 1.81 billion daily average last year.

Advancers outnumbered decliners on the New York Stock Exchange by about 11 to 5 and by about 2 to 1 on Nasdaq.

Apple, whose shares have almost quadrupled in value over the last year on the success of its iPod music player, announced a 2-for-1 stock split. Stock splits can boost sentiment broadly because they indicate a company's optimism about its future, and Apple's shares jumped 3.6 per cent, or US$2.85 to US$81.21.

Intel was up nearly 3 per cent, or 67 cents, to US$24.17, while AMD rose 2 per cent, or 36 cents to US$18.11.

Novellus Systems Inc., which makes semiconductor production equipment, jumped 7 per cent, or US$1.93 to US$29.45, after Credit Suisse First Boston investment bank raised its rating.

The Philadelphia Stock Exchange index of semiconductors climbed nearly 3.6 per cent.

The market overcame a disappointing quarterly report from personal computer maker and technology bellwether Dell Inc., which fell 3.8 per cent, or US$1.58 to US$39.99.

On Thursday, Dell posted earnings that reflected slow sales in the consumer market, and its revenue missed analysts' estimates for the fourth quarter. Dell's first-quarter revenue outlook also disappointed investors.

Among blue chips, a number of large-cap industrial stocks rose, such as Honeywell International Inc., up 68 cents to US$39.14 and General Motors Corp., 46 cents ahead at US$37.14.

"Techs are leading the parade, but the Dow is up and that's a continuation of a lot of money going after the big cap stocks -- which is what happens when a bull market becomes a bit more mature," said Goldman.

Earlier, traders said a rumour that North Korea's leader Kim Jong-il was ousted in a coup briefly lifted stocks. A White House spokesman said he hadn't heard anything about it. CNBC said intelligence sources told NBC news that they were unaware of any evidence supporting the rumour.

- REUTERS