By Alexander Davis, CBS.MarketWatch.com
NEW YORK (CBS.MW) -- Investors snatched up chip stocks on Friday, firing up the technology sector to put an upbeat finish on a week that saw the Nasdaq Composite Index drop 4.5 percent.
Semiconductor titan Intel paced the session's gains after some encouraging mid-quarter earnings comments by others in the industry.
The Nasdaq Composite , rising for the second consecutive session, surged 38.95 points, or 1.8 percent, to close at 2,149.44.
Moreover, the Nasdaq 100 Index of major tech stocks gained 2.3 percent while the Pacific Stock Exchange Technology Index /zigman2/quotes/210598455/delayed PSE +1.54% added 1.8 percent. The CBS MarketWatch 75 Index of information-economy stocks closed up 0.6 percent at 104.20.
The Goldman Sachs Internet Index climbed 2.2 percent. After making paltry early gains, the Amex Networking Index staged a rally and closed up 1.4 percent.
Outperforming the tech market's gauges, the Philadelphia Stock Exchange Semiconductor Index /zigman2/quotes/210598361/realtime SOX +2.83% rose 3.2 percent, reflecting gains by Intel, Novellus Systems and Advanced Micro Devices /zigman2/quotes/208144392/composite AMD +1.87% and Lattice Semiconductor /zigman2/quotes/204117531/composite LSCC +1.51% . Intel shares /zigman2/quotes/203649727/composite INTC +1.95% jumped $1.73, or 6.4 percent, to $28.74 on volume of 57 million, the No. 2 most active on the Nasdaq.
Intel, due to issue a midquarter update next week, may have benefited from a relatively upbeat assessment of the latest chip players to comment on their current quarters.
Novellus shares rose $2.50, or 5.2 percent, to $50.40 one day after the chip-manufacturing gear specialist announced that its earnings for the current quarter are on track to match Wall Street's expectations. CEO Richard Hill reiterated Novellus' projected earnings estimate of 40 cents a share on revenue of $379 million. Analysts expect a profit of 39 cents a share on revenue of about $357 million according to First Call/Thomson Financial.
Altera /zigman2/quotes/205871240/composite ALTR +3.16% rose $1.11, or 4.6 percent, to $25.11. On Thursday, the maker of programmable logic chips said it expected a 25 percent drop in year-over-year revenue for the current quarter, but some analysts said that outlook puts Altera in line with most expectations in the industry. PLD chips are processors that electronics manufacturers can customize to perform certain functions.
Microsoft /zigman2/quotes/207732364/composite MSFT +0.06% , which is awaiting an appeals court ruling on its landmark antitrust case, saw its stock rise $1.16 to $70.34. Observers are awaiting a decision that could come as early as Tuesday.
Elsewhere in the software arena, the Goldman Sachs Software Index rose 2.4 percent. Big winners included Computer Associates , which added $1.78, or 6.3 percent, to $30.14 and BMC Software , up $1.20 to $25.10.
Oracle shares /zigman2/quotes/202180826/composite ORCL +1.16% rose 56 cents to $15.86.
On Sunday, software industry leaders will gather in San Francisco to open the annual JavaOne conference. Oracle, IBM and BEA Systems are among the companies expected to show off new technologies at the event.