Two Tech Giants Lead the Dow's Gains
Whether Ben Bernanke and the Federal Reserve are backing off tapering plans or not, investors took his speech yesterday evening as a bullish sign for stocks. Bernanke said short-term rates would remain near 0% until unemployment reaches 6.5% and would likely remain low after that, given the slow increase in jobs domestically. None of this was really new news, but sometimes the market needs to be coddled and told that everything will be all right -- and that's exactly what Bernanke did yesterday. Late in today's trading session, the Dow Jones Industrial Average is up 1.1%, and the S&P 500 has gained 1.4%.
PC stocks helped drive those gains after IDC said global PC sales fell 11.4% in the second quarter. That was slightly better than expectations and a 13.9% decline in the first quarter. This doesn't mean PC sales are booming, but it may be a sign that the PC market is starting to stabilize. Shares of Intel were the biggest beneficiary of the news, jumping 3.1% today on hope that this will give the company more time to execute its plan to get into the mobile-chip business.
Microsoft is up 3% today after CEO Steve Ballmer announced a reorganization of the company that will allow it to innovate "with greater speed, efficiency, and capability." The company is trying to become more than a software company, integrating devices and services into its offerings as well. Microsoft "will pull together disparate engineering efforts today into a set of our high-value activities," according to Ballmer, making Microsoft a more focused and functional organization.
It will take years to tell whether the reorganization will pay dividends to shareholders, but this could be a sign that Microsoft is struggling to find its way in the new tech world. It survived for years as a software maker, but it's been forced to get into the device business, and it is struggling to market these products to consumers who have plenty of options.
It's an uphill battle for Microsoft but with only a handful of companies with the size to compete in the new tech world it has a fighter's chance to win the war. Find out who may be a better bet in "Who Will Win the War Between the 5 Biggest Tech Stocks," The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.
The article Two Tech Giants Lead the Dow's Gains originally appeared on Fool.com.
Fool contributor Travis Hoium manages an account that owns shares of Microsoft and Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.