After a lackluster open, semiconductor stocks have moved decidedly higher and are posting strong gains in late morning trading on Tuesday. The strength is sector is due in part to upwardly revised guidance from Microchip Technology Inc. (MCHP).
The gains by semiconductor stocks have contributed to a 2.3 percent advance by the Philadelphia Semiconductor Index. With the gain, the index is climbing back towards the nearly two-month intraday high set last Wednesday. Within the sector, shares of Microchip Technology are currently up by 2.3 percent after reaching their best intraday level in two and a half months earlier in the session.
The gain by Microchip Technology comes after the chip maker raised its earnings outlook for the fourth quarter, citing continuing robust demand for its products as well as very strong activity in China and Europe.
For the fourth quarter of fiscal year 2010, the company raised its GAAP earnings outlook to $0.37 per share from its prior estimate of $0.34 to $0.36 per share.
Steve Sanghi, Microchip's President and CEO said, "We are headed for record bookings this quarter, giving us confidence that the outlook for next quarter looks extremely positive."
In other sector moves, Advanced Micro Devices (AMD) and Intel (INTC) are also seeing strong outings, rising by 3.6 percent and 3.4 percent, respectively. AMD has reached a two and a half month intraday high, while Intel saw its best intraday price in eighteen months earlier.
Micron Technology Inc. (MU), Linear Technology Corp. (LLTC) and Broadcom Corp. (BRCM) are also posting substantial gains, further reflecting the buying interest in the sector.
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