US stocks rise as chip companies boost Nasdaq 1.2 per cent

NEW YORK (AFP) - Wall Street stocks rose on Friday with the Nasdaq climbing more than 1 per cent following a blowout earnings report from chip supplier Applied Materials.

Applied Materials, which provides materials and software to build semiconductors, surged 13.8 per cent after announcing that second-quarter orders jumped 37 percent from the year-ago period to US$3.45 billion (S$4.7 billion) as it predicted record profits in 2016.

Chip companies Western Digital and Micron Technology rose 3.1 per cent and 7.3 per cent, respectively.

Meanwhile, the broader market benefited from a bounce after largely negative trade the last three days.

“People were under-invested,” said Mace Blicksilver, director of Marblehead Asset Management.

The Dow Jones Industrial Average advanced 0.4 per cent to 17,500.94.

The broad-based S&P 500 rose 0.6 per cent to 2,052.32, while the tech-rich Nasdaq Composite Index jumped 1.2 per cent to 4,769.56.

Yahoo dropped 1.4 per cent following a Wall Street Journal report that said bids for Yahoo’s core Internet business are now expected to be in the US$2-3 billion range, below the US$4-8 billion range expected previously.

Deere, which manufactures agricultural equipment, fell 5.5 per cent as second-quarter earnings tumbled 28.3 per cent from the year-ago period to US$495.4 million due to the downturn in global farming conditions.

Gap rose 4.2 per cent as it announced it would shutter 75 stores this year amid sagging sales, including 53 of its kids-focused Old Navy brand outlets in Japan. Net income in the first quarter was US$127 million, down 47 per cent from the year-ago period.

Some analysts said beaten-down Gap shares were a good value.

Weak performers on the day included Dow member McDonald’s, down 2.2 per cent, drugstore chain CVS Health, down 1.5 per cent, and Kroger supermarket, down 0.6 per cent.