Computer-technology stocks rebounded Thursday on upbeat news about the demand for semiconductors, and the broad market continued its push into record-high territory.
The Dow Jones industrial average rose 11.56 points, to 4864.23, on New York Stock Exchange volume of 379 million shares.
Broader market indicators also rose. The Nasdaq composite index, dominated by computer-technology stocks, added 17.65 points, to 1065.59, just short of the all-time high of 1066.96, set in mid-September.
Late Wednesday, the Semiconductor Industry Association reported strong demand for microchips in September, contradicting widespread expectations of a slowdown. Semiconductor stocks did a U-turn and headed higher Thursday.
The 16-stock semiconductor index at the Philadelphia Stock Exchange, which was off nearly 10 percent the first three sessions this week, jumped 14.06 points, or 6 percent, to 248.75. Similarly, the 30-stock technology index at the Chicago Board Options Exchange, down 5 percent in the same sessions, rose 6.73 points, or 4 percent, to 173.91.
Late Thursday, U.S. Robotics, the Skokie-based maker of computer modems, blew away analyst projections with a report that fiscal fourth-quarter earnings equaled 75 cents a share, 10 cents higher than most analysts were expecting.
The Mexican peso, meanwhile, after sinking at the opening, closed higher along with Mexican stocks. The IPC Bolsa index at the Mexico Stock Exchange rose 89.69 points, or 4 percent, to 2324.16. On the NYSE, the American depositary receipts of Telefonos de Mexico gained 87 cents, to $27.12.
The peso fell to as low as 8.3 pesos per dollar during the day, sending a shiver through North American markets, but closed at 7.55 pesos per dollar, compared with 7.8 pesos Wednesday. The Bank of Mexico bought pesos with dollars to support the currency.
Among stocks in the news, upbeat sentiment about the earnings outlook for financial-service stocks helped that sector. American Express, one of the 30 Dow Jones industrial stocks, gained $1.75, to $43.37.
Apparel retailer Gap posted better-than-expected earnings, helping to lessen concerns about specialty stores. Gap rose $3.62, to $47.50. Late Thursday, however, upscale retailer Nordstrom reported earnings of 36 cents a share, down 22 percent from the year-earlier fiscal third quarter and below the consensus Wall Street estimate. The company said October sales were off more than 4 percent at stores open at least one year.
Biotech leader Amgen rose after an analyst at Salomon Brothers predicted the company will disclose positive breakthroughs for its treatment for Parkinson’s disease in a report to be presented next week to the Society of Neuroscience. Amgen added $1.75, to $49.50.
Bond prices slipped, despite the favorable report on producer prices. Bullish inflation news was widely expected, and some traders remained concerned about the debt-ceiling brinkmanship in Washington. The dollar also fell amid debt-ceiling worries after a White House official predicted a government shutdown next week.
Six former Treasury secretaries signed a letter to House Speaker Newt Gingrich urging him to take action to permit the government to finance itself while the budget debate proceeds.
Survey says: Investors in stocks and bonds would rather have a balanced federal budget than a cut in the capital-gains tax rate, according to a survey released Thursday by the Securities Industry Association. Asked to chose between the two alternatives, only 37 percent picked a capital-gains tax cut.
Ironically, Republicans in Congress believe a capital-gains tax cut is integral to balancing the budget for two reasons: In the short run, a lower tax rate on capital gains would prompt people to sell appreciated assets and pay tax on the gains; in the long run, they believe, a lower rate on capital gains would stimulate investment, economic growth and ultimately tax revenue.
On other matters, the telephone survey of 1,505 investors found that 32 percent subscribe to an on-line computer service and 41 percent use the service to obtain information about investing and to make investments.
Investors are generally pleased with their own brokers but are less sanguine about the brokerage industry as a whole. Two-thirds believe brokers are more interested in receiving commissions than in providing sound investment advice.
Local news: Standard & Poor’s boosted its rating on $75 million of debt securities issued by Northbrook-based IDEX, a manufacturer of fluid-control equipment. Noting that the company’s growth strategy relies heavily on debt-financed acquisitions, S&P said the company has nevertheless attained improved financial flexibility through doubling its cash flow and quadrupling the equity on its balance sheet.
– Chicago-based Vigoro, a supplier of fertilizer and other farm suppliers, boosted its quarterly dividend to 23 cents per share from 21 cents, payable Jan. 25 to shareholders of record Jan. 2.
– Glenwood-based Landauer, a maker of environmental hazard-detection equipment, raised its quarterly dividend to 27.5 cents a share from 25 cents, payable Jan. 11 to shareholders of record Dec. 29.
– Investment firm Smith Barney assigned a “buy” recommendation to APAC Teleservices, a provider of telemarketing services based in Deerfield. On Monday, Merrill Lynch rated the stock “above average.”
