BEIJING, Oct. 12 (Xinhuanet) -- US semiconductor makers, the stock market's worst performers this year, rebounded in the past month. Earnings reports from companies such as Intel Corp may help the shares pare more of their losses.

    Chip-related companies in the Standard & Poor's 500 Index reached their low for 2004 on September 8, based on the performance of an industry-group index. The measure's 8 per cent rise since then is the second biggest among 24 industries in the benchmark, and a further advance in semiconductor shares may help the S&P 500 add to its gain for the year.

    Intel, the world's largest producer of computer processors, was one of about 243 technology companies to say since July that earnings would be disappointing.

    "There have been enough announcements for us to know there will be a slowdown; that's already calculated into stock prices," said Carl Birkelbach, chief executive of Birkelbach Management Corp in Chicago.

    "The stage is set for those negative expectations to turn around and if they change at all, it will cause a move" higher, said Birkelbach, who oversees US$200 million and last month bought shares of Texas Instruments Inc, the biggest maker of chips that run mobile phones.

    Bearish bets on chip stocks jumped in September, and he said the increase may point towards a rally. Executives and directors at technology companies boosted stock purchases last quarter, also suggesting the worst may be over.

    Semiconductor shares fell last week as the S&P 500 dropped 0.8 per cent. The Dow Jones Industrial Average lost 1.4 per cent and the NASDAQ Composite Index, which gets 42 per cent of its value from computer-related stocks, dropped 1.1 per cent last week.

    Intel and Novellus Systems Inc, whose equipment builds circuits in computer chips, are among the more than three dozen companies in the S&P 500 scheduled to report quarterly results this week.

    With last week's drop, the S&P 500 pared its gain for 2004 to 0.9 per cent. The benchmark rose as much as 4.1 per cent at its peak in February, and dropped as much as 4.4 per cent at its August low.

    The chip-stock index fell 30 per cent this year, the biggest decline among the 24 industries in the benchmark. Concern that demand for personal computers and mobile phones weakened in the second half fueled the retreat.

    "Short interest," or the number of shares borrowed and sold to profit from a price decline, rose 10 per cent in September to 418.1 million for chip and chip-equipment stocks. The short interest was the highest since July 2003.

    Corporate insiders at technology companies bought US$86 million worth of their own stock in the third quarter, the highest in two years, according to Thomson Financial.

    "Insiders may have a feeling that things aren't that bad and that expectations are so low, that maybe there is the potential to surprise," said Birkelbach.

    Shares of Texas Instruments rose 17 per cent in the past month and Broadcom Corp gained 11 per cent, even after the companies lowered their third-quarter sales forecasts. The rally trimmed the loss for Texas Instruments to 25 per cent for the year, and 17 per cent for Broadcom. Enditem

(Edgar Ortega/China Daily)