Why the Dow Won Today

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The markets split in early morning trading, with The Dow taking the high road and the Nasdaq and S&P opting for the low road. But by the end of the day the S&P clawed back to virtually neutral. Here's the final scoring for the day:

 

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI )

+96.5

+0.76

12,720.48

Nasdaq

-1.63

(-.06%)

2,786.70

S&P 500

+0.88

+0.07%

1,315.38

What's interesting about today's performance is that the Dow greatly outpaced the competition, yet the index components were evenly split between winners and losers for the day. What this means is there were some big winners that did all the heavy lifting -- let's see who they were.

Tech reigns supreme

IBM (NYS: IBM) is the most heavily weighted component on the Dow, representing almost 11% of the total index. This weighting certainly mattered today, as the stock was up an impressive 4.67% on great earnings figures. The company also indicated 2012 earnings would exceed current forecasts. It's reasons like this that guru investor Warren Buffett picked up a 5.6% stake for Berkshire Hathaway (NYS: BRK.B) last year. The move was an unusual departure for Buffett, who normally doesn't touch tech, but it looks like it paid off.

Microsoft (NAS: MSFT) had an even better day than IBM, racking up an impressive 5.12% gain at the bell. Despite the run-up the company still trades at a relatively cheap P/E of 10.75. Many have been quick to dismiss Microsoft as a tech-value trap, but after their earnings indicated big gains in its gaming and server divisions, investors may want to think again.

Rounding out the top for winners today are tech giants (seeing a trend?) Hewlett Packard and Intel (NAS: INTC) . Intel posted strong performance on -- you guessed it -- strong earnings. The companies posted gains of 3.61% and 2.93%, respectively. It seems Hewlett Packard is along for the ride as strong performance from other tech companies could lend itself to a positive tea reading for the PC maker.

How to play it

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At the time this article was published Austin Smith owns shares of Berkshire Hathaway.  The Motley Fool owns shares of Microsoft, Intel, Berkshire Hathaway, and International Business Machines.Motley Fool newsletter serviceshave recommended buying shares of Berkshire Hathaway, Microsoft, and Intel.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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