Dow, S&P Snap Losing Streak, Helped by Techs

The Dow and S&P 500 snapped a two-day losing streak Thursday, led by technology stocks after an upgrade on the chip sector.

The tech-heavy Nasdaq closed up 1.4 percent, after three straight days of decline. The Dow Jones Industrial Average added 0.4 percent and the S&P 500 index gained 0.5 percent.

"If you're optimistic about growth in the second half, then what is tied to growth and most successful in times of growth? Technology,'' Marc Pado, U.S. market strategist at Cantor Fitzgerald in San Francisco, told Reuters.

Intel shares jumped 3.1 percent 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 benefited from raised outlooks from DuPont and Wal-Mart -- both Dow components.

Chemical maker DuPont raised its profit outlook this 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 advanced Thursday, 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 outsource its Web-search advertising to Google as part of a three-way alliance that would combine Yahoo with Time Warner's AOL Internet division.

Despite all the twists and turns, Wall Street largely believes that Microsoft will prevail. and that Microsoft's threats to lower its offer will evaporate.

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