Wall St gains on chip sector upgrade

Stocks rose on Thursday, helped by a brokerage upgrade of the semiconductor sector and after Wal-Mart Stores Inc (NYSE:WMT - News) raised its profit forecast.
Intel Corp (NasdaqGS:INTC - News) shares jumped nearly 4 percent and helped lift all three major U.S. stock indexes after Banc of America Securities upgraded the U.S. semiconductor sector, saying a modest inventory buildup has eased.

Tech shares also got a lift after JPMorgan Securities raised its profit forecasts on Apple Inc (NasdaqGS:AAPL - News). The iPod maker's stock rose 2 percent and contributed the most to the Nasdaq 100's (Nasdaq:^NDX - News) advance.

Shares of Wal-Mart climbed 1.3 percent to $54.83 after the world's largest retailer raised its outlook, citing expense controls and fewer markdowns. The stock gained in spite of Wal-Mart posting March same-store sales growth that fell short of Wall Street's expectations. An S&P index of retailers (Chicago Options:^RLX - News) gained 2.3 percent.

The Dow industrials also benefited from a positive outlook from an economic bellwether, DuPont Co (NYSE:DD - News).

News of fewer new claims for U.S. jobless benefits than expected also stoked buying interest.

"The unemployment claims and the improved outlook at DuPont might have given investors a little bit of help on a short-term basis," said Joseph Battipaglia, market strategist at Stifel Nicolaus in Yardley, Pennsylvania.

The Dow Jones industrial average (DJI:^DJI - News) rose 86.31 points, or 0.70 percent, to 12,613.57. The Standard & Poor's 500 Index (^SPX - News) gained 9.36 points, or 0.69 percent, to 1,363.85. The Nasdaq Composite Index (Nasdaq:^IXIC - News) climbed 35.51 points, or 1.53 percent, at 2,357.63.

The Philadelphia Stock Exchange index of semiconductors (Philadelphia:^SOXX - News) was up 2.1 percent.

Intel's stock gained 3.9 percent to $22.25 on the Nasdaq.

Apple shares were up 2.3 percent at $154.92 after JPMorgan Securities raised its second-quarter and 2008 estimates for the company.

Battipaglia said investors are still concerned about corporate profits as the quarterly reporting season gets under way.

"Earnings may have a few positive elements, but on balance, we'll be lucky to meet the lowered expectations for profits this quarter," Battipaglia said.

DuPont's stock shot up 1.2 percent to $49.64 on the New York Stock Exchange after the chemical company raised its profit outlook and said strong growth in its agriculture businesses and emerging markets should help offset weakness in U.S. housing and automotive markets.

Lehman Brothers shares rose as much as 2.5 percent to a session high at $41.57 after the Wall Street bank said in a filing it had liquidated three troubled investment funds and put $1 billion of assets onto its balance sheet. By midday, the stock had given up most of those gains, but was still up 0.4 percent at $40.69.

A government report showed the number of U.S. workers applying for unemployment benefits tumbled by a greater-than-expected 53,000 last week, but a moving average of claims was its highest in 2-1/2 years.