US stocks rose, sending the NASDAQ Composite Index to its third weekly gain in four, as networking-equipment shares climbed on optimism corporate profits will rebound this year. Cisco Systems Inc led the advance.
Semiconductor stocks declined, limiting gains in major stock indexes, after Advanced Micro Devices Inc said it may post a loss this quarter and Rambus Inc cut its revenue forecast.
"While earnings forecasts were adjusted down considerably in the past few months, we appear to be in a place where reality is not worse than, and may even be a bit better than, expectations." said Clare Zempel, chief strategist at Robert W. Baird & Co in Milwaukee.
The NASDAQ advanced 9.05, or 0.4 percent, to 2,084.79, extending yesterday's 5.3 percent gain. The Standard & Poor's 500 Index rose 7.54, or 0.6 percent, to 1,215.68. The Dow Jones Industrial Average climbed 60.07, or 0.6 percent, to 10,539.06.
For the week, the NASDAQ gained 4 percent, the S&P 500 rose 2.1 percent and the Dow advanced 2.8 percent.
The NASDAQ had its biggest rally in almost three months yesterday as some investors seized on Microsoft Corp's announcement that sales will top forecasts as evidence that corporate profits will pick up this year.
Four stocks rose for every three that fell on the New York Stock Exchange, while seven advanced for every six that declined on the NASDAQ Stock Market. Some 1.1 billion shares traded on the NYSE, 5 percent below the three-month daily average.
Computer-networking stocks led the gains after Juniper Networks Inc. said revenue won't fall from second-quarter levels.
Juniper, which makes equipment that directs Internet traffic, reported a loss in the second quarter as sales growth slowed. The stock, which surged 16 percent yesterday, gave up early gains and fell US$1.03 to US$27.44.
* The NASDAQ advanced 9.05, or 0.4 percent, to 2,084.79.
* The Standard & Poor's 500 Index rose 7.54, or 0.6 percent, to 1,215.68.
* The Dow Jones Industrial Average climbed 60.07, or 0.6 percent, to 10,539.06.
Cisco, the largest maker of networking equipment, advanced US$0.88 to US$18.74, and Extreme Networks Inc, a maker of computer-network switches, climbed US$0.20 to US$24.06. Lucent Technologies Inc, a maker of telecommunications gear, rose US$0.47 to US$7.33.
Among the most-active stocks: Sun Microsystems Inc. gained US$0.29 to US$15.64, Dell Computer Corp advanced US$.058 to US$27.95 and Qualcomm rose US$2.22 to US$65.58.
Advanced Micro Devices, Intel Corp's biggest rival in the market for computer processors, fell US$1.62 to US$21.08. The company reported a 92 percent decline in second-quarter profit and said it may have an operating loss this quarter, rather than the US$0.11 profit forecast by analysts, as sales drop further.
Rambus fell US$1.03 to US$9.85. The company, which licenses computer-memory patents to chipmakers, said it expects revenue in the fourth quarter ending in September to fall 20 percent from the previous period because of price cuts and the slowing personal computer market. Rambus reported a 20 percent slide in third-quarter profit as legal costs rose.
Semiconductor shares extended losses in the last hour of trading after Cymer Inc said it will report a loss in the third quarter, while analysts forecast break-even results. Cymer lost US$2.34 to US$24.37; Linear Technology Corp fell US$1.40 to US$42.64; Maxim Integrated Products Inc, dropped US$1.55 to US$43.96; and Altera Corp slid US$1.72 to US$31.16.
RSA Security Inc slid US$4.25 to US$25.70. The maker of computer-security software said earnings and sales will be lower than forecast this quarter. Internet-security software maker VeriSign Inc lost US$1.82 to US$54.48, and Check Point Software Technologies Ltd slipped US$2.73 to US$42.31.
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