Stocks Programmed for Big Gains

The day's economic data and email boxes filled with soft-landing and strong stock market outlooks for 2007 goosed the move.

"The path of least resistance is higher from here," says Michael Driscoll, head of listed trading at Bear Stearns.

The market's strength was broad-based as the Dow Jones Transportation Average rebounded Thursday, finishing up 1.5%. The semiconductor sector staged a comeback as well with the Philadelphia Semiconductor Sector Index gaining 1.9% Thursday while the Merrill Lynch Semiconductor HOLDRs(SMH Quote) exchange traded fund gained 1.6% on the day. Chips were led by Advanced Micro Devices (AMD Quote), which soared 12.6% after saying its recent merger with graphics-chip maker ATI should have a "wildly" positive impact on earnings in 2008.

Ciena (CIEN Quote) was another standout in the tech sector, rising 11.5% after returning to profitability in the fourth quarter and forecasting first-quarter earnings of 12 cents a share.

In the brokerage industry, shares of Bear Stearns(BSC Quote) gained 2.6% as the brokerage firm reported a record quarter, but Lehman Brothers'(LEH Quote) shares slipped 0.4%. Lehman merely beat estimates.

Discount retailer Costco(COST Quote) also beat estimates Thursday, which sent its shares up 1.8% as the rest of the retail complex also registered gains. The S&P Retail Index jumped 2.1% Thursday -- still rallying on Wednesday's strong retail sales report and the outlook for strong consumption going forward.