Sector Snap: Chip makers climb with market

Additionally, a Reuters/University of Michigan preliminary reading on consumer sentiment for June fell to 56.7 from 59.8. Investors had expected the reading to remain unchanged.

The two reports stoked investor speculation that the Federal Reserve will keep interest rates stable when it meets later this month.

By midday, the Philadelphia Semiconductor Index was up 9.78, or 2.6 percent, at 393.37.

The leader on the index was Marvell Technology Group Ltd. Its shares rose 94 cents, or 5.9 percent, to $16.91 after a Citi analyst reiterated a "Buy" rating on the fabless chip maker.

Other standouts on the index included Advanced Micro Devices Inc.--up 37 cents, or 5.2 percent, to $7.51--and Xilinx Inc., which advanced $1.24, or 4.8 percent, to $27.30. Intel Corp. rose 53 cents, or 2.4 percent, to $22.58.

Outside the index, shares of Qualcomm Inc. set a new year high, rising for a second day after the handset chip maker raised its quarterly and full-year guidance.

Qualcomm shares rose 77 cents to $49.75. They earlier traded as high as $49.94, eclipsing a 52-week high of $49.50 set May 30.

Elsewhere, shares of flash memory chip makers SanDisk Corp. and Micron Technology Inc. advanced. Micron rose 25 cents, or 3.4 percent, to $7.59, while SanDisk added 45 cents to $24.13.

Shares of chip makers--and especially makers of flash memory chips--have taken a beating this week after an industry trade group on Wednesday lowered its chip sales growth forecast for 2008. The Semiconductor Industry Association cited pricing pressure in memory chips.