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The dividend hike, which sent Intel shares up nearly 2 percent, also reflects a growing trend among technology giants like Cisco Systems Inc (CSCO.O) to give back more cash to shareholders following belt-tightening during the global economic slump.

"(Intel) believes their profitability is sustainable. My feeling is the PC business has been given up for dead for almost six months and there are some clear signs that things are bottoming out and maybe starting to improve," said Arnab Chandra, an analyst at Roth Capital Partners.

Intel's quarterly dividend will increase to 18 cents a share beginning in the first quarter of 2011. The dividend will be paid March 1 to shareholders of record February 7.

The company's shares rose 40 cents, or 1.9 percent, to $21.61 in afternoon trade.

Intel and other microchip companies have wrestled with low demand in a sluggish U.S. economy in recent months.

But in October, Intel Chief Executive Paul Otellini told analysts on a conference call that Intel was seeing greater-than-expected early demand for its highly anticipated "Sandy Bridge" chip, which combines central processing and graphics functions. The company also issued an upbeat forecast for the fourth quarter.

In a statement on Friday, Otellini said Intel's confidence in its business gave it the ability to return more cash to shareholders.

LEANER TECH

A regular dividend is generally regarded as the mark of a mature company that cannot match earlier growth rates or stock gains. Such companies tend to attract more conservative investors and are the antithesis of what many tech companies aspire to in their early years.

But other major players in the technology sector are also returning more money to investors after emerging from the economic slump much leaner and better at generating cash.

Cisco, one of the few remaining major technology companies to resist paying dividends, said in September that it would begin paying them next year, even as demand remains weak in the short term.

"The industry is structurally better positioned from a cash-generating standpoint, and that cash is not generating any interest," said Srini Pajjuri, an analyst at CLSA. "Margins are much better than before."

Broadcom Corp (BRCM.O) began paying a dividend this year and has said it would consider raising it if cash continues to build.

In September, Texas Instruments Inc (TXN.N) and Microsoft Corp (MSFT.O) increased their dividends.

Dallas Fed President Richard Fisher suggested this week that a bubble is already forming in private equity, with cheap debt fueling high-priced deals in an echo of the torrid days of leveraged buyouts before the subprime credit crisis cut off financing in 2007.

Fisher, who argued against the U.S. central bank's decision earlier this month to buy $600 billion in Treasuries to boost the recovery, told a San Antonio audience on Monday he is concerned about signs of "speculative activity" in buyouts, along with stocks, bonds and commodities.

He singled out private equity giant Carlyle Group's recent agreement to buy telecoms firm Syniverse Technologies, saying the price paid rivaled the lofty price tags common in the "pre-crash craze."

"As you know, buyout people do not typically acquire companies with a plan to expand the workforce, but instead with an eye to tighten operations, drive productivity, rejigger balance sheets and provide an attractive payback, usually in shorter time than under normal corporate horizons," Fisher said.

Carlyle agreed to pay a premium of 30 percent for Syniverse. Sources told Reuters that another party had also been vying for Syniverse, but lost out to Carlyle, which perhaps partly explains the premium.

A Carlyle spokesman declined to comment, but Fisher's remarks on private equity's job-destroying potential drew a feisty response from an industry group.

"The truth is that private equity firms often save jobs and grow employment over time; increase spending on R&D, plants and equipment; foster innovation; and deliver superior investment returns and social value," said Robert Stewart, a vice president at Washington-based Private Equity Growth Capital Council, which represents many of the largest U.S. buyout firms.

Private equity firms raise funds from investors such as pension and endowment funds, and pledge to invest that capital over a certain number of years. They typically aim to buy underperforming companies using a large amount of debt, fixing them up and selling them at profit.

Such leveraged buyout deals practically vanished after the credit crisis wiped away access to cheap financing, but have been returning as debt markets and the economy have improved.

Deals today are much less debt-heavy than they were before the crisis, with firms so far this year paying an average of 42 percent of the deal price in cash, compared with 29 percent in 2007, industry figures show.

But some buyout firms, which raised billions when times were better only to find they could not put the money to work, are under pressure to spend the dollars before their investment periods come to an end. There is also greater incentive to buy and sell assets this year, ahead of an anticipated tax hike.

BUBBLE TROUBLE

Kansas City Fed President Thomas Hoenig, who dissented at every Fed meeting this year and called on the U.S. central bank to raise, not lower, borrowing costs, has also warned that further Fed easing may fuel bubbles. But Fisher's comments took the issue further by focusing on a single industry that soared high before stumbling badly in the financial crisis.

Now cheap debt is back, with junk bond yields at their lowest since October 2007, Fisher noted.

Investor demand for GM's common shares is currently around $60 billion and rising, the sources said. GM filed with U.S. regulators to raise about $10 billion worth of common stock, meaning that the common stock portion of the IPO is currently about six times oversubscribed.

There is also "excess demand" for the $3 billion worth of preferred shares GM plans to sell, the sources said.

The robust demand suggests that GM will likely price its IPO around the top end of the $26 to $29 per share range and that the full greenshoe -- additional shares underwriters can sell to help stabilize the stock after it begins trading -- will be exercised, the sources said.

The full overallotment could take the total IPO amount to as much as $15.65 billion including both common and preferred shares, making it the second-biggest U.S. IPO ever after Visa Inc (V.N).

It would also cut the U.S. Treasury's stake to just over 40 percent. The Treasury currently owns 60.8 percent of GM common stock as a result of the automaker's $50 billion bailout.

GM is still accepting investor orders for shares in the IPO and is not expected to close the order books until early next week, the sources said.

The sources did not have permission to speak publicly and declined to be named.

ASIA, MIDDLE EAST BUY

GM is in the final stage of talks to sell equity to Chinese partner SAIC Motor Corp (600104.SS) as part of the IPO and is likely to reach an agreement over the weekend, three sources said. The stake is expected to be less than $2 billion, two of the sources said.

Middle Eastern and Asian sovereign wealth funds have also committed to a combined $2 billion stake, the sources said.

While selling a big chunk of shares to overseas state-backed investors such as SAIC could trigger a political backlash, GM's advisers and underwriters have argued those investors could help provide long-term stability to the price of GM's stock.

Retail investors are expected to account for about 20 percent of the IPO, two sources said. There is currently retail demand for $2 billion to $3 billion worth of shares, one source said.

(Reporting by Clare Baldwin and Soyoung Kim in New York and Philipp Halstrick in Frankfurt, editing by Matthew Lewis)

Penney posted on Friday net income of $44 million, or 19 cents per share, for the quarter ended October 30, up 63 percent from its profit of $27 million, or 11 cents per share a year ago.

Net sales rose 0.2 percent to $4.19 billion. Same-store sales, or sales at stores open at least a year, rose 1.9 percent.

Analysts on average were expecting a profit of 17 cents per share on sales of $4.25 billion, according to Thomson Reuters I/B/E/S.

Penney, which caters to a more cost-conscious customer than competitor Macy's Inc, forecast same-store sales would be up 3 percent to 4 percent during the holiday quarter, but warned the retail environment would "remain highly promotional."

Last month, activist investor William Ackman took a 16.5 percent stake in the retailer and said he would discuss how to improve the company's performance.

(Reporting by Phil Wahba, editing by Gerald E. McCormick)

Thomson Reuters/University of Michigan Surveys of Consumers release at 1455 GMT (9:55 a.m. ET) preliminary November consumer sentiment index. Economists in a Reuters survey expect a reading of 69.0 compared with 67.7 in the final October report.

Companies announcing results on Friday include Agilent Technologies (A.N), D.R. Horton (DHI.N) and JCPenney (JCP.N).

G20 leaders drew a veil over their economic policy disputes on Friday, agreeing to tackle tensions that have raised the specter of currency wars and giving the nod to countries that have seen huge capital inflows to impose controls.

At 1530 GMT, ECRI releases its weekly index of economic activity for November 5. In the prior week the index read 123.2.

The chief executive of Wal-Mart Stores Inc's (WMT.N) Asia operations said he would not comment on whether it was bidding for Indonesian retailer Matahari's (MPPA.JK) hypermarket business.

Yahoo Inc (YHOO.O) called a media report it was planning to cut one-fifth of its workforce "misleading and inaccurate," but the Web portal stopped short of ruling out any layoffs.

Shares in California Pizza Kitchen Inc (CPKI.O) fell 4 percent after the bell on Thursday as it reported results.

European stocks dropped on Friday, losing ground for the third straight session, hurt by escalating fears over Ireland's debt problems that also dragged the euro to six-week lows versus the dollar. The FTSEurofirst 300 .FTEU3 index of top European shares was down 1.3 percent. * EU leaders sought to reassure bondholders unnerved by Ireland's fiscal problems they would not be forced to take a writedown, but Ireland's Prime Minister said recent French and German comments had aggravated the problem.

A statement by France, Germany, Italy, Spain and Britain was issued at the Group of 20 summit in Seoul after spreads on Irish 10-year government bonds over German bunds surged to a record high, hitting the debt of Portugal and Spain and the euro.

Japan's Nikkei .N225 dropped 1.4 percent on Friday, with profit-taking intensifying as Chinese shares fell sharply and as oil and other commodity prices plunged.

Resource-related stocks will be in focus as crude oil dropped $2 a barrel to below $86. Key base metals prices fell 1.6 to 2.6 percent.

On Thursday, the Dow Jones industrial average .DJI fell 73.94 points, or 0.65 percent, to 11,283.10. The Standard & Poor's 500 Index .SPX shed 5.17 points, or 0.42 percent, to 1,213.54. The Nasdaq Composite Index .IXIC lost 23.26 points, or 0.90 percent, to 2,555.52.

(Reporting by Atul Prakash; Editing by Erica Billingham)

A statement by France, Germany, Italy, Spain and Britain was issued at the Group of 20 summit in Seoul after spreads on Irish 10-year government bonds over German bunds surged to a record high, hitting the debt of Portugal and Spain and the euro.

"Whatever the debate within the euro area about the future permanent crisis resolution mechanism and the potential private sector involvement in that mechanism we are clear that this does not apply to any outstanding debt and any program under current instruments," the statement said.

Irish Prime Minister Brian Cowen told the Irish Independent newspaper that the stance of some EU members, and particularly comments by Germany and France, had complicated his efforts to battle a financial crisis that threatens his government.

"It hasn't been helpful," he said, referring to German Chancellor Angela Merkel's intervention. "What has been said there has had, I think, an unforeseen consequence, perhaps."

"I'm not suggesting that anything was said for the purposes of causing further difficulty," he said in the interview, but added:

"The consequence that the market has taken from it is to question the commitment to the repayment of debt."

He said bond markets were "behaving irrationally" and Irish interest rates had jumped by 1 percent on Wednesday for no reason.

The EU is looking at new rules for debt issued from 2013 that may entail private investors rolling over existing debts or to bear their share of losses, as has been the case in new contracts written into debt programs of some emerging market issuers.

Ireland forced its way onto the G20 agenda as investors fretted it could default as a result of the rising costs of its bank rescue program that has already driven its budget deficit to 32 percent of gross domestic product.

"I spent a bunch of time, and I'm sure other ministers did, talking about developments in Europe. But that's what you'd expect," a senior U.S. official said, in response to a question about Ireland.

So far, Ireland has not requested financial aid.

Dublin's fiscal woes have been triggered by concerns that it will need to spend more to rescue its stricken banking system in

On Thursday, the cost of insuring Irish debt against default hit a record high and the 10-year Irish bond spread over equivalent German debt -- another measure of perceived risk -- reached 685 basis points, the highest since the euro was introduced.

A Reuters poll showed that 20 of 30 economists surveyed believed Ireland would need a bailout worth around 48 billion euros before the end of 2011.