U.S. MARKET AVERAGES

Tech sector performed especially strong after Apple posted a fivefold increase in fiscal third quarter net income of 37 cents a share on a 75% increase in revenue, beating analysts' forecasts of 31 cents a share. Apple’s shares gained 9%.

Shares of AMD gained 3.2% and supported the early rally in chips sector after posting a surprisingly strong 2Q results on climbing sales of chips for servers and notebook computers.

ECONOMIC NEWS

On the economic news front, consumer prices in June were unchanged as energy prices actually fell, the Labor Department said Thursday. Excluding food and energy prices, core inflation at the consumer level increased 0.1%. The figures were well below expectations of a 0.2% increase.

U.S. retail sales rose a better-than-expected 1.7% in June, the Commerce Department estimated Thursday. The sales gain was led by auto sales, which rose 4.8%. Excluding autos, sales increased 0.7%. Ahead of the report, economists were expecting a 1.0% rise in retail sales, and a 0.6% increase in sales excluding motor vehicles. The strength was tempered somewhat by weaker May sales than first believed. May sales were revised to a drop of 0.3% compared with the initial estimate of a 0.5% gain.

First-time filings for state unemployment rose by 16,000 to a six-week high of 336,000 in the week ended July 9, the Labor Department said Thursday. Back on the employment front, the Labor Department said the number of former workers collecting jobless checks rose by 45,000 in the week ended July 2 to 2.62 million, a four-week high. The four-week average of continuing claims declined by about 5,000, standing at 2.60 million. The insured unemployment rate increased by 0.1 percentage point to 2.1%.

The level of initial jobless claims has fallen by about 6% in the past year vs. claims averaging about 340,000 a year ago. Last year continuing claims were about 300,000 higher, averaging 2.92 million.

INTERNATIONAL MARKET NEWS

Asian benchmarks made solid gains on U.S. strength and tech optimism on the back of strong results from chip maker Advanced Micro Devices and Apple Computer. Japanese stocks rose to a three-month high, reaching 0.9% rise, as traders bought high-tech issues. Hong Kong’s Hang Seng reached a four-year high of 1.29% with gains in property stocks. The South Korean Kospi advanced to a ten-year high of 1.1% on tech and auto shares. The dollar traded at 111.83 yen in Tokyo at 5 p.m.

European stocks advanced at mid-day trading boosted by gains in the semiconductor sector with Infineon Technologies and STMicroelectronics among the gainers after AMD and Apple Computer released better-than-anticipated results. Positive news from Swiss drug maker Novartis and Belgian brewer InBev also provided a lift, as well as U.S. economic data and jumps in retail sales. The German DAX 30 added 0.7%, The French CAC 40 gained 0.9%, and London’s FTSE rose o.3%. In currency markets the euro was flat at $1.2074.

ENERGY, METALS AND CURRENCIES MARKETS

The dollar climbed against major currencies on expectations of positive U.S. inflation and retail data, following a narrower U.S. trade deficit gains. The euro traded at $1.2079, the pound quoted at $1.7619. The greenback bought 111.98 yen.

Gold traded near its lowest levels after falling Wednesday as the dollar climbed on a government report reducing the appeal for the precious metal. In London gold traded at $422.85 bid per troy ounce. In Hong Kong it dropped $3.20 to $422.55 per ounce. In India, the biggest consumer of gold, August delivery fell to $434 bid per ounce on the MCE. Silver traded at $6.98.

Oil prices went below $60 a barrel dragged on healthy increase in U.S. heating and diesel stocks and downward revision of world demand. August delivery of sweet light crude fell 35 cents to $59.66 a barrel. London Brent was off 22 cent at $58.05 a barrel.

EARNINGS NEWS

AMCORE Financial, posted 2Q earnings rise of 49 cents a share vs. 41 cents a year ago on deposit growth, but missed estimates of 50 cents a share.

Fairchild Semiconductor International swung to a 2Q loss of $1.71 per share compared with a net income of 14 cents a share last year, missing expectations of 5 cents net income. The quarterly results include $195.3 million non-cash charges.

Fifth Third Bancorp, financial services company, reported income decline of 75 cents a share vs. 79 cents a year earlier on lower long-term interest rates and weaker deposit growth. The results exceeded expectations of 74 cents a share.

HDFC Banc, Indian third-biggest bank, posted 1Q income rise of 1.84 billion rupees compared with 1.4 billion last year on growth in loans and fee-based income. The quarterly results are in line with expectations.

Knight Ridder, newspaper publisher, reported 2Q profit decrease of $1 per share vs. $1.08 a year ago due to declines in circulation income and increased costs. Analysts had expected 99 cents per share.

Landstar System, logistics and transportation services provider, posted 2Q income growth of 39 cents a share against 29 cents last year, beating estimates of 36 cents a share.