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Intel, Wal-Mart Help Boost Stocks

Stocks advanced Thursday, helped by an upgrade on the chip sector and increased forecasts from two Dow components.

Intel shares jumped about 4 percent, buoying all three major indexes, after Banc of America Securities upgraded its rating on the semiconductor sector, saying a modest inventory buildup had eased.

The tech-heavy Nasdaq also got a boost after J.P. Morgan raised its outlook for Apple earnings, saying stronger-than-expected MacBook shipments will offset softer iPhone and iPod sales.

Blue chips advanced after DuPont and Wal-Mart -- both Dow components -- raised their guidance and jobless claims came in better than expected.

Chemical maker DuPont raised its profit outlookthis morning, saying strong growth in its agriculture businesses and emerging markets should help offset weakness in U.S. housing and automotive markets. The company now expects first-quarter earnings of $1.29 a share, up from its previous range of $1.14 to $1.19 a share.

Retailers largely reported dismal same-store sales, with discount chains Wal-Mart and Costco being the exception.

Wal-Mart Stores raised estimates for its first quarter, citing expense controls and fewer markdowns. The company now expects earnings between 74 and 76 cents a share, up from its prior range of 70 to 74 cents a share. The discount-retail giant said its March same-stores sales excluding fuel rose 0.7 percent, in-line with the company's expectations; including fuel, such sales increased 1.1 percent.

Wholesale-warehouse club Costco said sales at stores open at least a year rose 7 percent in March, topping analysts' expectations of just 5.9 percent.

Wal-Mart's hipper rival, Target, reported a bigger-than-expected 4.4 precent decline in same-store sales, the latest in a string of disappointing results from the chain.

Specialty chains and department stores continued to struggle. Even upscale retailers are feeling the pinch, with Nordstrom and Saks posting declines of 9.1 percent and 2.9 percent, respectively, both of which were bigger decliners than expected.

However, high-end jeweler Tiffany said it expects a second half recovery in U.S. stores and is mulling expansion.

Regardless of good or bad reports, most retail stocks advancedThursday, which traders told CNBC was due to the fact that the sector was one of the most heavily shorted and the stocks haven't come off much from January lows, so the downside is limited.

The market buzz started early today, with news that Rupert Murdoch has joined in the battle for Yahoo . News Corp. is apparently in talks with Microsoft to make a joint bid for Yahoo, according to people involved in the discussions. The combination, which would join Yahoo, Microsoft’s MSN and News Corporation’s MySpace, would create a behemoth that would upend the Internet landscape.

A day earlier, the angle of this Silicon Valley soap opera was that Yahoo was in talks to carry Web-search advertising from Google as part of a broader outsourcing deal. And, Legg Mason -- a major Yahoo shareholder -- was said to be on deck and ready to support Yahoo's campaign for independence should Microsoft lower its bid.

Despite all the twists and turns, Wall Street largely believes that Microsoft will prevail.

Underlying the market's upswing today was a low hum of concern about the global financial industry ahead of earnings from major U.S. banks next week. Expected to report are JPMorgan on Wednesday, Merrill Lynch on Thursday and Citigroup on Friday.

Lehman Brothers said in a regulatory filing that it had liquidated three poorly performing funds and put the $1 billion in assets on its balance sheets. Shares of the investment bank were off 2.8 percent in premarket trading.

In economic news, jobless claims fell by 53,000-- more than double of what was expected -- last week. The U.S. trade deficit unexpectedly rose for a second straight month in February, hitting $62.3 billion as a jump in imports of foreign-made cars offset the first decline in oil imports in a year.

The Bank of England cut UK interest rates by a quarter percentage point to 5 percent, while the European Central Bank held interest rates at 4 percent. While other central banks are able to cut interest rates to promote economic growth, the ECB's hands are tied: A mandate required it to focus solely on price stability.

Meanwhile, Treasury Secretary Henry Paulson said the U.S. economy has "turned down sharply"and that there are still risks from the housing and finance sectors. A commitment by Fannie Maeand Freddie Macto raise additional capital is critical to efforts to help the ailing mortgage market, Paulson said in remarks to the Council of Institutional Investors.

This Week:

THURSDAY: Retailers' same-store sales reports; Bernanke speaks about President's Working Group; U.S. budget; Earnings from Genentech
FRIDAY: Import prices; consumer sentiment; GE earnings; G7 finance chiefs meet in Washington

Send comments to cindy.perman@nbcuni.com.