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Good news, bad news for chips

Semiconductor stocks face a sell-off in late trading as investors take profits after the release of a strong supply-and-demand report for November.

Semiconductor stocks faced a sell-off in late trading today as investors took profits after the release of a strong supply-and-demand report for November.

A report known as the "book-to-bill ratio," which compares new orders against shipments of chips, last month reached 1.15 for North and South America. The figure represents $115 new orders for every $100 in shipments, marking its highest level in more than a year and the fifth consecutive month it has improved.

New orders reached $3.96 billion for November, up 6.1 percent from the previous month, according to the Semiconductor Industry Association. Shipments, meanwhile, rose 2.9 percent to $3.44 billion, compared with October figures, according to the report, which was released after the market's close yesterday.

Chips makers initially got a significant boost from the news in morning trading, but late in the afternoon investors began to take their money and run.

"Healthy profit-taking took place today," said Dan Klesken, an analyst with Robertson Stephens. "By midday, many stocks were still up from their opening. But by the end of day, a large fraction were down."

He added that many of the semiconductor stocks have moved at a good clip of late, so that the profit-taking is no need for concern.

Intel (INCT), Advanced Micro Devices (AMD) and Cyrix (CYRX) were down at the market's close from the previous day.

Intel traded as high as 133-3/8 per share this morning, before closing at 129-1/8 a share. That was down from its close of 130-1/8 yesterday. (Intel is an investor in CNET: The Computer Network.)

AMD closed at 26-1/8 a share, down 1/2 from the previous day. The chip maker, however, traded as high as 27-3/8 a share during the day.

Cyrix did not get as much mileage from the book-to-bill figures. The company never climbed beyond its Monday's close of 22-3/8 a share, before closing down at 19-1/2 a share today.

Meanwhile, Texas Instruments (TXN) remained unchanged at 66-5/8 a share at the market's close. But during the day, its shares traded as high as 68-3/8 a share.

Motorola (MOT) was among the semiconductor companies to maintain its gain from the day before, ending up 1/2 of a point to close at 55-1/4. And during the day, the giant chip maker peaked at 56-3/8 a share.