(Updates to midafternoon, changes byline)
* Tech advances after upbeat Dell, Marvell earnings
* Global tech demand offsets U.S. weakness
* Volatile oil price sparks caution
By Ellis Mnyandu
NEW YORK, May 30 (Reuters) - U.S. technology shares rose on
Friday as investors took computer maker Dell Inc's <DELL.O>
upbeat profit as signaling that business spending was holding
up, boosting optimism about the outlook for big-cap tech
companies.
But even with the tech advance, volatile crude oil prices
spurred uneasiness, keeping the S&P 500 <.SPX> and the Dow
Jones industrial average <> at break-even.
Since oil prices hit a record above $135 barrel last week,
investors remain concerned about the effect of soaring fuel
costs on inflation and on consumer spending, a key driver of
economic growth.
In addition, data on Friday showed that consumer confidence
fell to a 28-year low in May.
Still, Dell shares jumped more than 6 percent, putting the
stock among the Nasdaq composite index's top boosters, along
with chip designer Marvell Technology Group Ltd <MRVL.O>, up
more than 24 percent, thanks to stronger-than-expected
earnings.
The semiconductor index <.SOXX> , up 2.3 percent, was on
track for its second straight monthly advance, which will cap
its longest winning monthly streak since October 2006.
"The strength of Dell's numbers was a pleasant surprise,"
said Georges Yared, founder and chief investment officer at
Yared Investment Research in Wayzata, Minnesota.
"What this demonstrates is that technology spending is very
strong globally. It may not be as strong domestically, but U.S.
weakness is being offset by global demand. So tech is probably
positioned now for a very good second quarter."
The Dow Jones industrial average <> gained 3.91 points,
or 0.03 percent, to 12,650.13. The Standard & Poor's 500 Index
<.SPX> climbed 3.41 points, or 0.24 percent, to 1,401.67. The
Nasdaq Composite Index <> shot up 17.71 points, or 0.71
percent, to 2,526.03.
Dell shares rose to $23.28 on Nasdaq, while Marvell shares
rose to $17.51. Contributing most to Nasdaq's rise were shares
of iPod and iPhone maker Apple Inc <AAPL.O>, up 1.2 percent at
$188.89.
Shares of Cisco Systems Inc <CSCO.O>, whose routers and
other networking gear form a backbone of corporate networks,
were the biggest contributor to the S&P 500's rise, up 2.1
percent at $26.75 on Nasdaq.
Computer maker Hewlett-Packard Co <HPQ.N> led the Dow's
tech components with a gain of 1.1 percent to $47.41 on the New
York Stock Exchange.
Shares of American International Group Inc <AIG.N> were the
biggest percentage gainers on the Dow, up more than 2 percent
at $36.14 on the NYSE, after Morgan Stanley said the recent
decline in the insurer's stock was overdone and raised its
rating. For details, see []
Shares of consumer-oriented companies like retailers were
among the top drags, with shares of Costco Wholesale Corp
<COST.O>, the leading U.S. warehouse club operator, down more
than 2 percent at $71.40 after Piper Jaffray cut its rating on
the stock.
Shares of Coca-Cola Co <KO.N>, the world's largest
soft-drink company, declined 1.1 percent to $57.24 on the NYSE,
while rival PepsiCo Inc <PEP.N> slipped 0.7 percent to $68.38.
U.S. crude <CLc1> gained 76 cents, or 0.6 percent, at
$127.38 a barrel on the New York Mercantile Exchange.
In economic news, the core personal consumption
expenditures price index -- the Federal Reserve's preferred
measure of inflation -- moderated in April from the previous
month, easing inflation fears.
But a Reuters/University of Michigan gauge of consumer
confidence fell to a 28-year low in May, keeping stock gains in
check. A separate report showed business activity in the U.S.
Midwest contracted for May for the fourth consecutive month,
but the rate of downturn moderated.
(Editing by Kenneth Barry)
