LIVE MARKETS-Wall Street indexes close to flat; chips outperform

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WALL STREET INDEXES CLOSE TO FLAT; CHIPS OUTPERFORM

Wall Street indexes are making little progress on Friday with investors bullish on chip stocks while they digest the latest Washington policy moves.

After the first week of earnings, investors were also preparing for a long weekend - with U.S. markets closed Monday for Martin Luther King Day. Friday's session is following a choppy trading week so far with the S&P 500 .SPX registering two days of gains, an intraday record high, and on track for three days of losses.

Among the 11 major S&P 500 industry sectors just 5 are gaining. Industrials .SPLRCI and Real Estate .SPLRCR are leading the advancers.

In tech, chip stocks are outperforming. The Philadelphia semiconductor index .SOX is up ~1% and among its biggest gainers is memory chipmaker Micron Technology MU.O. While a regulatory filing showed that a board member had bought $7.8 million worth of shares in Micron, both Citi and Barclays raised their price targets for the stock.

Meanwhile, it may have helped that Vice Premier Cheng Li-chiun said on Friday that Taiwan aims to become a close strategic partner with the United States in the area of artificial intelligence (AI) after striking a deal to cut tariffs and boost its investment in the country. Chip stocks have been on a tear, also rallying sharply on Thursday, after upbeat results from advanced AI chipmaker TSMC TSM.N.

But, on the far side of the fence Materials .SPLRCM is the biggest decliner followed by Utilities .SPLRCU.

Weakness in Utilities seems related to reports that governors from U.S. states seeing a rapid expansion in data center construction are expected to visit the White House on Friday to sign an agreement with the Trump administration intended to curb rising electricity costs.

Other notable news on Friday morning included a survey showing U.S. homebuilder sentiment deterioration in January as affordability worries sidelined potential buyers and rising costs hampered construction activity. The National Association of Home Builders/Wells Fargo Housing Market index fell two points to 37, remaining below the 50 break-even point for 21 straight months and missing economists' expectations for an increase to 40.

But on the plus side, U.S. factory production unexpectedly increased in December amid a surge in primary metals output that offset a decline at motor vehicle assembly plants, but activity contracted in the fourth quarter against the backdrop of challenges from import tariffs.

Here is a snapshot of the market taken at 10.25 a.m. ET/ 1525 GMT:

(Sinéad Carew)

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