Tech stocks end up, Nasdaq gains for 7th week

By Reuters

Published: December 3, 2005, 1:44 PM PST

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U.S. technology shares rose on Friday, sending the Nasdaq Composite index to its seventh straight week of gains as investors bought semiconductor shares, including Intel Corp. amid signs of growth in the economy.

A government report showed robust U.S. job growth in November, slightly above market expectations, but the report also revived concerns that too much growth could prompt the Federal Reserve to continue raising interest rates to keep inflation in check.

The Dow Jones industrial average was down 35.06 points, or 0.32 percent, at 10,877.51. The Standard & Poor's 500 Index was up 0.41 point, or 0.03 percent, at 1,265.08. The technology-laced Nasdaq Composite Index was up 6.20 points, or 0.27 percent, at 2,273.37.

For the week, the Dow ended down 0.5 percent, the S&P; ended off 0.25 percent and Nasdaq closed up 0.46 percent. The weekly declines for the Dow and the S&P; 500 put an end to five straight weeks of gains for the two gauges.

On Nasdaq, a continued appetite for semiconductor stocks amid growing hopes for improved revenue and profits helped stocks like Intel advance. Deutsche Bank raised its share price target for Intel.

Technology shares were likely to remain a hot sector as investors look for opportunities to profit at the end of the year, said Bill Punk, managing partner, Punk Ziegel & Company.

"You want to be in stocks like technology. Semiconductors are finally looking like they are going to stay alive for a while," he added.

A rise in crude oil prices weighed on energy-reliant industrial conglomerates like General Electric, whose shares slipped by 0.7 percent to end at $35.50. Shares of heavy machinery maker Caterpillar dropped 0.3 percent to $58.81.

Oil prices rose 85 cents to $59.30 a barrel, weighing on energy-reliant industrial stocks amid forecasts for a blast of cold weather for the U.S. Northeast.

Commenting on the Dow's decline, Punk said "the market needed to back off a little bit and recoup."

The U.S. job market accelerated last month from a hurricane-induced slowdown as employers added 215,000 workers to their payrolls, the Labor Department said. The unemployment rate held steady in November at 5 percent.

In other news:

"The employment numbers were good. It shows the economy is good, but that also has some people thinking the Fed probably won't take a break from raising interest rates," said Rich Parker, head of trading, Stanford Group,

Shares of aluminum producer Alcoa, another big energy consumer, fell 0.6 percent to $28.10.

Investors also pushed down shares of General Motors, also a Dow component, after Merrill Lynch analyst John Casesa said in a research note "we anticipate an ongoing slowing of auto demand in the U.S. that will impact all automakers." GM shares ended off 2.3 percent at $22.08.

Biotech shares were also weak after several days of bad news in the sector. Inspire Pharmaceuticals'shares plunged 34.05 percent to end at $4.90 after U.S. regulators found studies submitted by the company insufficient to establish the efficacy of its eye drug.

Starbucks shares gained 2.5 percent to $31.93 after the coffee shop chain said sales at its shops open at least 13 months rose 7 percent in November.

Volume was heavy on the NYSE where about 1.53 billion shares changed hands, above last year's daily average of 1.46 billion. On the Nasdaq, volume was about 1.79 billion compared with last year's daily average of 1.81 billion.

Advancers were nearly even with decliners on the New York Stock Exchange, while advancers beat decliners by about 8 to 7 on Nasdaq.