Wall Street bounces higher as chip stocks gain

By Sruthi Shankar

(Reuters) - U.S. stocks advanced on Monday, with gains in shares of chipmakers and technology giants helping Wall Street extend last week's rally that was powered by U.S. jobs data.

Gains in Apple, Amazon and chipmakers Broadcom and Micron Technology drove the S&P 500 higher.

Broadcom rose 2.9 percent following report that Intel was considering a possible bid for the company.

General Electric rose 2.2 percent and was the biggest boost to the Dow.

The advances followed a near 2 percent gain for the main indexes on Friday after data showed sluggish wage growth in February, easing concerns about the Federal Reserve moving too fast on interest rate hikes.

"The market was particularly optimistic that wage growth wasn't too hot for fear of inflationary concerns," said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

Traders of U.S. short-term interest-rate futures kept bets the Federal Reserve will stick to three rate hikes this year.

A month ago, the markets were gripped by fears of higher wages leading to price pressures, triggering a selloff that dragged the main indexes to correction territory.

However, the S&P and the Dow have nearly reclaimed those losses. Rapid gains in technology stocks have already powered the Nasdaq back to its record levels.

At 9:35 a.m. ET, the Dow Jones Industrial Average was up 0.23 percent at 25,394.24. The S&P 500 rose 0.17 percent at 2,791.32 and the Nasdaq Composite gained 0.25 percent to 7,579.83.

Last week's gains were also supported by U.S. President Donald Trump's softer stance on his decision to impose import tariffs on steel and aluminium by exempting Canada and Mexico.

Investors will pore over the next round of data on consumer prices and retail sales due this week for signs of rising price pressure.

Ten of the 11 major S&P sectors were higher, led by 0.62 percent gain in consumer discretionary stocks.

Oclaro jumped 25 percent and was the most traded stock after laser and optical fibre specialist Lumentum Holdings said it would buy the optical components producer for $1.7 billion. Lumentum's shares rose 3.8 percent.

Advancing issues outnumbered decliners on the NYSE by 1,592 to 877. On the Nasdaq, 1,509 issues rose and 860 fell.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)