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Semiconductor industry

Stocks Rally on Intel's Forecast and Improved Manufacturing Data

Strategic Insights

— 2 min read

Stocks surged on Tuesday, with the Dow Jones Industrial Average witnessing its best gain in three months, following Intel's better-than-expected sales forecast and improved manufacturing gauges. The S&P 500 added 3 percent, while the MSCI World Index of 23 developed nations surged 2.8 percent. Intel jumped 7.3 percent, its highest gain since March, after announcing increased chip orders from computer makers due to stronger demand expectations.

Key Takeaways:

  • Intel's forecast sales exceeded analysts' estimates, with revenue expected to reach as much as $8.9 billion in the third quarter, compared to an average analyst projection of $7.86 billion.
  • The Federal Reserve's gauges of New York manufacturing and industrial output showed a better-than-projected performance, spurring optimism about the economy's recovery.
  • The S&P 500 has rallied 38 percent from its 12-year low on March 9, amid speculation that the economic contraction is slowing.
  • Earnings topped estimates by an average of 20 percent for the 16 companies in the S&P 500 that released second-quarter results since July 8, according to data compiled by Bloomberg.
  • Analysts estimate profits slumped by an average of 35 percent in the second quarter and will decrease by 21 percent from July to September, according to Bloomberg data.
  • Technology shares led the market higher, adding 4.2 percent collectively, with Microsoft Corp. jumping 4.4 percent to a nine-month high of $24.12.
  • Advanced Micro Devices Inc., the second-largest maker of personal-computer processors, advanced 8.7 percent to $3.86, climbing the most since May 4.
  • Cisco Systems Inc. rallied the most since March, adding 5.8 percent to $19.81, following a "buy" recommendation in new coverage at Citigroup Inc.

Statistics:

  • The Dow Jones Industrial Average gained 256.72 points, or 3.1 percent, to 8,616.21.
  • The S&P 500 added 3 percent to 932.68.
  • The MSCI World Index of 23 developed nations surged 2.8 percent.
  • Intel jumped 7.3 percent to $18.05, its highest price since October.
  • Microsoft Corp. jumped 4.4 percent to $24.12, its biggest gain since April 24.
  • Advanced Micro Devices Inc. advanced 8.7 percent to $3.86, climbing the most since May 4.
  • Cisco Systems Inc. added 5.8 percent to $19.81, the most since March.

Sources:

  • "Intel forecast sales that beat analysts' estimates and gauges of manufacturing improved" (The Pittsburgh Tribune-Review, Jul. 16)
  • "The S&P 500 has risen 6.1 percent so far this week as better-than-estimated retail sales boosted consumer shares" (The Pittsburgh Tribune-Review, Jul. 16)
  • "Earnings topped estimates by an average 20 percent for the 16 companies in the S&P 500 that released second-quarter results since July 8, according to data compiled by Bloomberg" (The Pittsburgh Tribune-Review, Jul. 16)
  • "Analysts estimate profits slumped an average 35 percent in the period and will decrease 21 percent from July through September, according to Bloomberg data" (The Pittsburgh Tribune-Review, Jul. 16)
  • "The S&P 500 has rallied 38 percent from its 12-year low on March 9 amid speculation the economic contraction is slowing" (The Pittsburgh Tribune-Review, Jul. 16)

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