NEW YORK – Technology stocks roared back Wednesday, driving the Standard & Poor’s 500 and Dow Jones industrial average to record highs.
The industry has lagged the broader market this year, but surged after network communications company Adtran reported earnings that were double what Wall Street analysts expected. That boosted optimism that businesses will increase spending on technology equipment.
Shares of Chipmakers Micron and Intel jumped, as did other network equipment makers like Cisco and JDS Uniphase. Stocks were also up on an optimistic reading of the Federal Reserve Bank’s latest minutes.
Technology stocks rose 1.8 percent, the most of the 10 industry groups in the S&P. That’s a big change from tech’s weak performance this year. The group is up just 4.7 percent, trailing the S&P’s gain of 11.3 percent.
“Tech has performed so poorly, it’s oversold and warrants some interest here,” said Scott Wren, a senior equity strategist at Wells Fargo Advisors. “If the economy continues to improve, there is going to be some capital spending.”
The stock market is reversing course from last week, when investors’ confidence fell because of an unexpectedly poor report on the U.S. job market and other signs that the economy slowed in March.
The Dow Jones industrial average jumped 128.78 points, or 0.9 percent, to 14,802.24. It was the third straight gain for the blue-chip index and its biggest one-day rise in a month. The Dow surged in the first three months of the year and is still up 13 percent in 2013.
The Nasdaq composite, which is heavily weighted with technology stocks, had the biggest percentage gain of the three main indexes Wednesday, rising 59.39 points, or 1.8 percent, to 3,297.25. The S&P rose 19.12 points, or 1.2 percent, to 1,587.73.
Among stocks making big moves, Facebook rose 98 cents, or 3.7 percent, to $27.57 after General Motors said it would start running ads on the social network site. Adtran rose $2.75, or 14 percent, to $22.46, and JDS Uniphase rose 64 cents, or 4.8 percent, to $13.98.
Hospital stocks fell heavily after Deutsche Bank lowered its recommendation on the companies because their prices have risen so much that they no longer offer good value.