Market Wrap: Wall Street Ends 4-Day Skid on Late Tech Rally

Financial Markets Wall Street
Richard Drew/AP

By Chuck Mikolajczak

NEW YORK -- U.S. stocks rose modestly Friday after late news of merger talks among two semiconductor companies boosted the technology sector and helped major indexes snap a four-day losing streak.

The Wall Street Journal reported chipmaker Intel is in talks to buy rival Altera, citing people familiar with the matter, sending the PHLX semiconductor index up 2.8 percent.

%VIRTUAL-pullquote-We've seen a lot of M&A news recently and it's helping the market.%Intel (INTC) shares jumped 6.4 percent to $32 as the biggest boost to the Dow, S&P 500 and Nasdaq 100 indexes. Altera (ALTR) shares surged 28.4 percent to $44.39.

"We've seen a lot of M&A news recently and it's helping the market," said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.

"There is definitely an M&A cycle going on, so that is a good thing."

Equity markets were largely unfazed by Fed Chair Janet Yellen's comments at a monetary policy conference in San Francisco. She said the U.S. Federal Reserve is giving "serious consideration" to beginning to reduce its accommodative monetary policy and a rate hike may be warranted later this year, although a downturn in core inflation or wage growth could force it to hold off.

"I don't think there is anything new or different here," said Massocca.

The Dow Jones industrial average (^DJI) rose 34.43 points, or 0.19 percent, to 17,712.66, the Standard & Poor's 500 index (^GSPC) gained 4.87 points, or 0.24 percent, to 2,061.02 and the Nasdaq composite (^IXIC) added 27.86 points, or 0.57 percent, to 4,891.22.

Health care also helped buoy indexes as biotech stocks bounced 1.9 percent higher after suffering a 7 percent drop in the prior four sessions, while energy was the worst performing S&P sector as crude prices resumed their decline.

Looming Earnings Season

Investors have been cautious ahead of the start of earnings season, as traders look to see how much the strong U.S. dollar will hurt corporations' bottom lines. For the week, the S&P 500 fell 2.2 percent, the Dow lost 2.3 percent and the Nasdaq declined 2.7 percent.

U.S. consumer sentiment fell month-over-month in March, a survey released on Friday showed, though the decline was smaller than forecast.

The final reading of gross domestic product for the last quarter of 2014 was unchanged at a 2.2 percent rate of expansion. After-tax corporate profits fell at a 1.6 percent rate in the fourth quarter as a strong dollar dented the earnings of multinationals.

Advancing issues outnumbered declining ones on the NYSE by 1,842 to 1,187, for a 1.55-to-1 ratio; on the Nasdaq, 1,592 issues rose and 1,106 fell, for a 1.44-to-1 ratio favoring advancers.

The benchmark S&P 500 index posted 6 new 52-week highs and 6 new lows; the Nasdaq composite recorded 38 new highs and 38 new lows.

Volume was light, with about 5.66 billion shares traded on U.S. exchanges, well below the 6.78 billion average so far this month, according to BATS Global Markets.

What to watch Monday:

  • Cal-Maine Foods (CALM) reports quarterly financial results before U.S. markets open.

  • The Commerce Department releases personal income and spending for February at 8:30 a.m. Eastern time.

  • The National Association of Realtors releases pending home sales index for February at 10 a.m.

  • The Federal Reserve Bank of Dallas releases its survey of manufacturing conditions in Texas at 10:30 a.m.