Stocks Rise: IBM, Intel Divide Dow As AMD Leads Chip Gains | Stock News & Stock Market Analysis

Stocks opened to narrow gains Wednesday, as news of an Intel (INTC) design flaw triggered busy early action among chip stocks.

X The Dow Jones industrial average started 0.1% higher, while the S&P 500 rose a bit less than that. The Nasdaq Composite gained 0.2%, giving it some padding above the 7000 mark above which it closed for the first time on Tuesday.

IBM Pops On Upgrade; AMD, Ambarella Lead Chip Stocks As Intel Takes Hit

IBM (IBM) opened 1.7% higher, at the top of the Dow industrials. RBC Capital raised IBM to outperform from sector perform. The stock has been working to climb the right side of an 11-month consolidation.

Apple (AAPL) climbed 0.6%, to within 2% of a base-on-base pattern buy point at 176.34.

Among the FANG stock tech leaders, Netflix (NFLX) gained 0.8% to take an early lead. The gain lifted shares to less than 1% below a 204.48 buy point in an 11-week flat base.

Chip stocks were generally positive, following a strong performance on Tuesday. The leading exception was Intel, which pared its opening loss to 2.2%. News reports beginning late Tuesday reported discovery of a design flaw, allowing a security lapse in the central operating system for what appears to be most Intel microprocessors. Early reports said the programming fix to the flaw slows the computers significantly, and is likely to affect millions of computers. Intel has not yet released the specifics explaining the problem.

Intel rival Advanced Micro Devices (AMD) leapt more than 6% at the open. The microprocessor developer had soared nearly 7% in weak trade on Tuesday, retaking support at its 10-week moving average for the first time since October.

IBD 50 name Nvidia (NVDA) perked up more than 3% in early action. The move hoisted shares back above support at the stock’s 10-week moving average for the first time since the start of December. The stock is in a six-week flat base with a 217.46 buy point.

System-on-a-chip designer Ambarella (AMBA) popped 3%. Shares are in the fifth week of a flat consolidation.

News of mergers and non-mergers also helped drive early trade. South Carolina-based utility Scana (SCG) jetted 23% higher at the start of trade. The company reportedly agreed to be acquired by Dominion Energy (D) in a deal valued near $14.6 billion, including debt. Dominion opened down 4%.

Shares of MoneyGram International (MGI) dived more than 9% on news that a third review by U.S. regulators had ended the attempted takeover of the company by Alibaba Group Holdings’ (BABA) Ant Financial unit in a proposed $1.2 billion deal. Alibaba shares edged up 0.2% in heavy early trade.

Euro Markets Get New Rules; Automakers December Sales

In economic news, investors were trained on European markets, which traded higher as a new set of trading rules labeled MiFid II came into effect. The regulations, a reformed version of laws implemented following the financial crisis in 2007, are intended to avoid some of the transparency issues that contributed to the 2007-2009 market collapse. Frankfurt’s DAX and the CAC-40 in Paris were each up 0.5%, while London’s FTSE 100 fought to hold a 0.1% gain.

U.S. markets are beginning to look toward Friday’s payrolls report, and automakers are expected to report December and year-end sales totals throughout today’s session. The Institute for Supply Management’s December manufacturing index and November construction spending numbers from the Commerce Department are due out at 10 a.m. ET. The Federal Reserve releases minutes from its Dec. 12-13 meeting at 2 p.m. ET.


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Originally posted 2018-01-07 07:19:01.


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