Why the Dow Is Rallying

Trading sessions like today's highlight what a drag Europe has had on domestic markets. Seemingly every time "apocalypse euro" news hits a pause, stocks soar. Today investors were treated to improving housing data, but the real enthusiasm is coming from a two-day Federal Reserve meeting that began this morning. The market is desperately seeking a new round of stimulus from Bernanke & Co., so while the VIX (NYSE: ^VIX  ) is down again today, expect volatility to return once the meeting concludes tomorrow. Meanwhile financials like Bank of America (NYSE: BAC  ) , which is up 5%, are soaring on the potential extension of Operation Twist.

That said, let's take a closer look at how the three major indexes are faring.

Index

Gain/Loss

Gain/Loss %

Intraday Value

Dow Jones Industrial Average (INDEX: ^DJI  ) 145.05 1.14% 12,886.87
Nasdaq 41.84 1.45% 2,937.17
S&P 500 17.21 1.28% 1,361.99

Source: Yahoo! Finance.

The major U.S. indexes are all turning in strong 1%-plus gains, with the Nasdaq leading the charge. Tech stocks are performing well today, and the biggest news in the sector comes from Dow component Microsoft (Nasdaq: MSFT  ) . The company unveiled its Apple (Nasdaq: AAPL  ) iPad-challenging tablet, dubbed Surface, with much acclaim.

Pricing for the Surface has yet to be announced, but it will run Windows 8 with live tiles and has an innovative keyboard integrated into the cover and a "kickstand" in the back, which Microsoft compared favorably to a luxury car door. Microsoft boldly becomes a direct competitor to partners like Hewlett-Packard and other flailing tablet makers, but considering no one else has seriously challenged Apple's dominance of the space, combined with Microsoft's own failure in licensing out its operating system to smartphone makers, the decision isn't shocking. On the surface (pun intended) and after revealing a tablet well ahead of the competition, it appears to be justified.

While it'll take time to see if Surface is a real threat to the iPad, Microsoft appears to be on the right track. Should Apple investors be concerned? Stay up to date with our exclusive and timely premium research reports on Apple right here.

David Williamson holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Microsoft, Bank of America, and Apple. Motley Fool newsletter services have recommended buying shares of Apple and Microsoft. Motley Fool newsletter services have also recommended creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1917648, ~/Articles/ArticleHandler.aspx, 9/2/2014 10:29:46 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement