US stocks rallied on Wednesday following an upbeat forecast from chip maker Intel Corp (NASDAQ:INTC) that fueled hopes for a lift in technology spending, and an improved outlook from the Federal Reserve also helped support the market.
The Dow Jones industrial average rose 257 points to 8,616. The S&P500 Index added 27 points to 933 and the NASDAQ rose 63 points to 1,863. In economic news: The Federal Reserve released the minutes from its last policy meeting, showing that although the economy remained weak, the pace of the decline appears to be slowing.
A government report showed the consumer price index, a measure of inflation, rose 0.7 per cent in June after rising 0.1 per cent in May. Economists had expected a 0.6 per cent rise.
And another report released by the government showed that industrial production fell 0.4 per cent in June, after falling 1.2 per cent in May. Forecasts were for a drop of 0.6 per cent.
In company news: Shares in semiconductor chip maker Intel Corporation (NASDAQ:INTC) rose 7.25 per cent to $18.05. The company posted better than expected earnings and revenue after the closing bell on Tuesday and forecast stronger revenue growth in the third and fourth quarters as demand for personal computers increases.
Communications and information technology company Cisco Systems Inc (NASDAQ:CSCO) gained 5.77 per cent to $19.81. Reuters reports that Citigroup has begun coverage of Cisco, giving the company its first rating of ’buy’, saying that it expects Cisco to outperform when the economy starts to recover.
Shares in aviation and defense products and services company AAR Corp (NYSE:AIR) rallied 15.66 per cent to $17.95 after the company reported earnings for the fourth quarter that came in above expectations.
And shares in aircraft maker Boeing Co (NYSE:BA) up 2.35 per cent to $41.36. The company says it plans to cut around 1000 staff on its missile defense program and future combat systems as a result of U.S. Defense Department budget cuts.
Checking the NASDAQ Top 100: The best performer was Logitech International which gained 7.93 per cent to $14.84. Juniper Networks and Flextronics also closed stronger. On the downside, the worst performer was J.B. Hunt Transport Services, which fell 9.79 per cent to $26.72. Pharmaceutical Product Development and Apollo Group also closed weaker.
