TECH STOCKS: Techs Kick Off Third Quarter With Gains

By Benjamin Pimentel

The tech sector kicked off the third quarter with modest gains Wednesday, as bellwethers Intel Corp., Microsoft Corp. and Oracle Corp. advanced in late afternoon trading.

The Nasdaq Composite Index (RIXF) was holding onto a 0.8% gain at 1,850, with less than an hour left in the session.

Shares of Intel (INTC) traded up 3.4%, while Microsoft (MSFT) gained 1.5% and Oracle (ORCL) added 1.9%.

Intel got a boost after a positive preview from Barclays Capital analyst Tim Luke, who told clients to expect "solid" second-quarter results from the chip giant when it reports earnings later this month.

"We remain impressed by Intel's crisp execution and maintain a constructive bias at present," Luke wrote.

He also offered a mixed view of the broader chip sector, noting that key vendors will likely "report stronger second quarter vs. guidance with inventory modest and solid/broadly seasonal guide reflecting holiday build."

But he also echoed lingering concerns about long-term demand, adding, "We consider that visibility on end market sell-thru for holiday season remains uncertain given the weakened macro backdrop and we remain selective."

Investors appeared to embrace a more positive view, however, as chip stocks again outpaced the rest of the tech sector, with the Philadelphia Semiconductor Index (SOX) gaining 2%. Intel's arch-rival Advanced Micro Devices (AMD) was up 1.8%.

Meanwhile, the Morgan Stanley High-Tech 35 Index (MSH) gained 0.9%.

Shares of International Rectifier Corp. (IRF) were up more than 1% after announcing that it has settled a dispute with Vishay Intertechnology (VSH) over its 2007 acquisition of IRF's Power Control Systems. Vishay shares also gained, up 3.2%.

Also trading to the upside were shares IBM Corp. (IBM), Cisco Systems (CSCO) and Apple Inc. (AAPL).

Sitting out the rally, Yahoo Inc. (YHOO), eBay Inc. (EBAY) and Dell Inc. (DELL) were all in the red.