Stocks Rebound as Investors Load Up on Chips
Stocks bounced back Friday as investors piled into chip stocks, offsetting the drag of financials.
Tech stocks advanced as investors looked to the beaten-down sector for investment opportunities.
Chips blazed the trail, with strong gains in Texas Instruments and National Semiconductor .
Other techs, including Dell and Yahoo also posted strong gains.
In economic news, U.S. consumer sentiment fell to its lowest level in three monthsas nearly two-thirds of those surveyed said they expected the downturn to last five more years.
Financials took a hit across the globe after British bank Lloyds said its HBOS subsidiary posted a loss of 8.5 billion pounds($12.28 billion) as it was hit by a 7-billion-pound impairment charge at its corprate division. In London, Lloyds shares fell as much as 40 percent.
Here in the U.S., JPMorgan and Bank of America were the two biggest drags on the Dow.
Wall Street was still digesting details of the government's economic stimulus plan.
With the stimulus package close to a vote, Congress agreed late Thursday on a "strong" Buy American provision that would see much of the public works in the $789 billion bill going to US companies. But there is language in the bill calling for the US to honor trade pacts with certain nations.
General Motors is preparing a plan on how to use government bailout money to restructure its operations. The plan is due Tuesday from GM, which also refuted reports that it was preparing to sell its stake in a joint venture with Shanghai's SAIC Motor.
Meanwhile, Toyota Motor said it was slashing executive compensation and offering buyouts to 18,000 workers to combat a slump in domestic auto sales.
PepsiCo shares were in focus after the company reported a sharp loss in quarterly profit but met Wall Street expectations of 46 cents a share.
Abercrombie and Fitch shot up more than 10 percent after the teen retailer beat analysts' earnings expectations.
Stocks were mostly higher in morning trading in Europe, while the major indexes in Asia also posted gains.
"I think there's a chance for a run up to the recent highs of 870 (on the S&P 500)," David Jones, chief market analyst at IG Index, told "Worldwide Exchange."
But the market really needs a stronger catalyst and could be stuck in a trading range until more big-name earnings come out, Jones added.
Also Thursday, Republican Sen. Judd Gregg of New Hampshire withdrew his nomination as commerce secretary, citing conflicts with President Barack Obama's handling of the stimulus package.
Still to Come:
FRIDAY: G7 finance ministers meet in Rome; Consumer sentiment
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