The Tech Story the Market Overlooked

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Stocks suffered a turkey-induced hangover today, with the Dow Jones Industrial Average (INDEX: ^DJI ) and the broader S&P 500 (INDEX: ^GSPC ) losing 0.3% and 0.2%, respectively. The Nasdaq, however, bucked the trend, gaining a third of a percentage point. Today was all about big-cap tech:

The micro view: Facebook (Nasdaq: FB ) jumped 8.1% to a four-month high on an upgrade from Sanford C. Bernstein. Sanford's analyst raised his price target from $23 to $33, arguing that the social network will generate revenues of $7 billion next year -- well ahead of the $6.4 billion consensus estimate. Even excluding today's gain, Facebook shares were up 35% from their Sept. 15 low closing price of $17.73. With the stock experiencing a remarkable reversal in momentum and Sanford Bernstein blazing the trail, I think we can expect to see a flurry of analyst upgrades in the days and weeks to come. Nevertheless, I would caution investors not to try to anticipate, game, or time these events -- that's a trader's bread and butter and has nothing to do with investing.

E-commerce stocks including Amazon.com (Nasdaq: AMZN ) and eBay (Nasdaq: EBAY ) also did very well today on the back of strong numbers from the Thanksgiving weekend/online Monday shopping period. However, I think the more interesting story from Amazon is that the online retailer is set to do its first bond issue in more than a decade. Does the company need the cash? No: The company is cash-flow positive and has more than $5 billion in net cash on hand. Why the offering, then? Because the cost of issuing debt for governments and corporations is at a historic low. This is smart capital management and is consistent with Amazon's long-term approach to value creation. To find out why Fool analyst and value maven Joe Magyer thinks "Amazon is just warming up," click here to request his new premium report, which includes to a full year or ongoing coverage.

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Alex Dumortier, CFA, has no positions in the stocks mentioned above; you can follow him on Twitter, @longrunreturns. The Motley Fool owns shares of Amazon.com and Facebook and has options on Facebook. Motley Fool newsletter services recommend Amazon.com, eBay, and Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

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