TECH STOCKS: Intel Powers Tech Rally

By Benjamin Pimentel

The tech sector rallied Wednesday, powered by an upbeat Intel Corp. earnings report that reignited hopes of a broader rebound.

That optimism was also highlighted by the Dow Jones Industrial Average (DJI), which reclaimed the 10,000 mark for the first time since October 2008.

The sector focus was squarely on Intel (INTC), the world's biggest semiconductor company, which reported a lower profit, but better-than-expected sales and a fourth-quarter outlook that exceeded Wall Street's expectations.

The Santa Clara, Calif.-based chip behemoth's shares were up 2%, as the Nasdaq Composite Index (RIXF) advanced 1.2% to 2,165.

"Absent a double-dip recession, expect above-average financials well into 2010," Charter Equity Research analyst Edward Snyder said in a note.

And Intel's momentum is good news for the personal computer manufacturers, Kaufman Bros. analyst Shaw Wu said.

"The takeaway for many PC vendors is positive," he said in a note, citing such players as Hewlett-Packard and Apple.

Shares of H-P (HPQ) were up 2.3%, while Apple (AAPL) gained 0.7% and Dell Inc. (DELL) rose 1.8%.

Riding on Intel's upbeat view of the near future, shares of other chip companies also rose. Intel's arch-rival Advanced Micro Devices (AMD), which reports its results on Thursday, saw its shares jump 2.3%.

These gains helped set the stage for a sector-wide rally that pushed the Morgan Stanley High Tech 35 Index (MSH) up 1.3%, while the Philadelphia Semiconductor Index (SOX) added 0.6%.

Other gains came from major tech players including Amazon.com (AMZN), Google Inc. (GOOG) and Oracle Corp. (ORCL).