Why Tech Stocks Beat the Dow Today
It was a mixed day in the market, as the Dow and S&P were essentially flat and the tech-heavy Nasdaq ticked up a bit.
|Dow Jones Industrial Average (INDEX: ^DJI)||-9.38 [-0.07%]||12,707.08|
|Nasdaq (INDEX: ^IXIC)||+11.41 [+0.40%]||2,859.68|
|S&P 500 (INDEX: ^GSPC)||+1.45 [+0.11%]||1,325.54|
From a macro standpoint, there wasn't much news today. Thirty-year mortgage rates did hit a record low for the ninth time in the last year, though. Freddie Mac reports that the average rate is now 3.87%. If you're a homeowner, it's a good idea to check in on your current terms.
Up tomorrow is January's jobs report. We'll see whether the 8.5% unemployment rate moves any.
Looking at individual stocks, it was a relatively good day for tech stocks. If we loosely define tech, we see some exuberance from yesterday's after-hours Facebook S-1 filing in front of an upcoming IPO. Its symbiotic game-slinging partner Zynga (NAS: ZNGA) saw shares rise 17% -- probably because Facebook revealed that it gets 12% of its sales from Zynga.
Meanwhile, more traditional video gamer Electronic Arts rose 6% on expectations-beating earnings. And communications equipment maker Qualcomm rose 2% on strong earnings and a positive outlook.
That said, tech stocks weren't universally up when we look at the 30 Dow components. AT&T and Microsoft were up 0.6% and 0.2% and Cisco was flat. But Hewlett-Packard (NYS: HPQ) , Verizon, IBM, and Intel were all down --- though each less than 1%. Hewlett-Packard was the biggest Dow tech dropper, down 0.9% as rival Dell gainedground on an analyst upgrade and the announcement of a new "Software Group."
It was an eventful day for tech, as investors excitedly unlocked Facebook's financial privacy settings. But remember to gather information and keep a long-term perspective. As we await Facebook's IPO, remember to weigh any company's potential against the valuation of the shares.
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At the time this article was published Anand Chokkaveluowns shares of Microsoft and Cisco Systems. The Motley Fool owns shares of Cisco Systems, Microsoft, IBM, and Intel.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Intel, Qualcomm, and Cisco Systems, creating a bull call spread position in Microsoft, and writing covered calls in Dell. We Fools don't 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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