Good news emerged from the depths of one of the market's most tortured sectors Tuesday, helping the broader market rebound from its recent malaise.In the wake of upbeat news from chip company KLA-Tencor ( KLAC) the beleaguered semiconductor sector made a come-from-behind surge to lead the broader market's comeback. At an annual semiconductor industry conference in San Francisco, KLA-Tencor CEO Rick Wallace said the company had "a very good quarter," adding the company beat its bookings target for the second quarter. The company's shares increased 8.21%, helping the Semiconductor HOLDRs ( SMH) gain 3.1%. (Heading into Tuesday's session, the SMH was down nearly 14% since Dec. 31, as chip stocks paced the Nasdaq's underperformance.) Led by the chips, "the market held critical areas of support and turned higher, and that is bullish" for the near term, writes Alexander Grace, trader and hedge fund consultant. Notably, the S&P 500 bounced after trading below its 200-day moving average of 1263.73; the index closed up 0.4% to 1,272.52 vs. its intraday low below 1260. Following similar patterns, the Dow Industrial Average closed up 0.28% to 11,134.77 after trading as low as 11,027.99, while the Nasdaq gained 0.6% to 2,128.86 vs. its nadir of 2095.69. Prior to the chip-led comeback, the market was punishing companies with any hint of negativity in their earnings releases. Most notably, Alcoa ( AA) shed 4.9% after it posted slightly weaker-than-expected revenue Monday evening Also, Lucent ( LU) tumbled 6.4% after it lowered guidance. In Alcoa-like fashion, shares of biotech concern Genentech ( DNA) were falling in post-market trading after it reported earnings that beat analyst expectations. The whisper of bad news in Genentech's report was weaker-than-expected sales figures for Avastin.