Investors Optimistic Ahead of Bellwether's Report

N E W  Y O R K, June 7 -- Stocks rose, resuming a late-spring rally, as the market's vacillating viewof corporate earnings swung back to positive with upbeat talkfrom National Semiconductor.

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Meanwhile, much of the market's attention was focused onIntel and the company's business update, expected afterthe market close.

The Nasdaq composite index climbed 46.12 points, or 2.08percent, to 2,263.85, according to the latest data. The DowJones industrial average added 20.43 points, or 0.18 percent,to 11,090.67. The benchmark Standard & Poor's 500 index rose6.92 points, or 0.54 percent, to 1,276.95.

"Even though the earnings that are going to come out inthis next quarter are pretty weak, there's a sense that maybetech land is bottoming out," said Michelle Clayman, chiefinvestment officer at New Amsterdam Partners.

Semiconductor stocks led the charge higher after a tradegroup, the Semiconductor Industry Association, said theindustry will rebound in the second half of this year, grow 20percent in 2002 and 25 percent in 2003. The Philadelphia StockExchange's Semiconductor Index rose 7.68 percent to a highunseen since May 21.

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National Semi reported a loss on lower sales, but thechipmaker said there may be signs of recovery on the horizon,as the company contends with an industry-wide inventory glut.The shares rose $3.07 to $31.04.

Intel is expected to give its interim update after themarket closes on Thursday, and traders are looking to theleading semiconductor maker to help give clues to the fate ofearnings in the high-tech sector. Intel was up $1.34 at$31.16.

Much of the Dow's earlier stuggle came from Philip Morris, which fell $1.62to $48.38. A Superior Court jury in Los Angeles ruled Wednesday thecompany must pay $3 billion to a cancer-stricken smoker, thelargest judgment against a cigarette maker in a lawsuit brought byan individual.

But what investors are most focused on are earnings, bracingthemselves for the upcoming second-quarter results that will bequite weak, Johnson said. Adding to investor wariness is theincreasing belief that third-quarter results will be even worse andthe uncertainty over whether business will improve by the end ofthe year.