Recs

1

Why Big Blue Is Moving the Dow Today -- and Every Other Day

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

A bundle of important tech stocks are riding high today, all thanks to positive Tuesday-night earnings reports.

IBM  (NYSE: IBM  ) jumped as much as 6.3% overnight thanks to the margin-boosting effects of strong software sales. Big Blue beat analyst targets on both the top and bottom lines.

Google  (NASDAQ: GOOGL  ) has soared 6.5% in another case where rising margins overpowered somewhat slow top-line growth. Investors loved the strong earnings more than they disliked the top-line disappointment.

Even chronically troubled chip designer Advanced Micro Devices  (NASDAQ: AMD  ) rose to the challenge with a massive 10% gain, based on strong sales of high-margin server-class products. Revenue was in line with Wall Street estimates, but the non-GAAP losses turned out somewhat slimmer than expected.

All of this high-margin tech love boosted the Silicon Valley-friendly Nasdaq index by 0.3%, even as the broader S&P 500 benchmark traded down. This makes sense: Actual results in the Nasdaq's core sector should count for more than the worries over debt ceiling reform and soft European growth predictions that slowed down the wider market today.

But why, then, is the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) gaining 68 points, or 0.5%, as of 1:45 p.m. EST? More than two-thirds of the 30 blue-chip stocks are trading in the red, after all. That includes three of the five tech-based components.

However, IBM is not only the Dow's biggest mover today -- it's also the most influential stock on the index to begin with, courtesy of a share price in the $200 range.

For every 1% Big Blue's shares move, the Dow gains or loses 16 points. IBM added 80 points to the Dow today, single-handedly overcoming a storm of small drops.

So there you have it, for better or for worse. When IBM jumps or falls by some outlandish amount like the 5% it has gained as of 1:45 p.m. EST, it's almost impossible for the Dow not to follow suit.

If you're looking for some long-term investing ideas, let me invite you to read the Fool's brand-new special report: "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so just click here and get your copy today.


Read/Post Comments (0) | Recommend This Article (1)

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: 2211111, ~/Articles/ArticleHandler.aspx, 7/28/2015 6:42:01 AM

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...

Anders Bylund
TMFZahrim

Anders Bylund is a Foolish Technology and Entertainment Specialist. Where the two markets intersect, you'll find his wheelhouse. He has been an official Fool since 2006 but a jester all his life.

Hypoallergenic. Contains six flavors not found in nature. Believes in coyotes and time as an abstract.

Follow Anders on social media: Twitter, LinkedIn, and Google+.

Today's Market

updated 9 hours ago Sponsored by:
DOW 17,440.59 -127.94 -0.73%
S&P 500 2,067.64 -12.01 -0.58%
NASD 5,039.78 -48.85 -0.96%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

7/27/2015 4:00 PM
IBM $159.07 Down -0.68 -0.43%
International Busi… CAPS Rating: ****
AMD $1.62 Down -0.05 -2.99%
Advanced Micro Dev… CAPS Rating: **
GOOGL $658.27 Up +3.50 +0.53%
Google (A shares) CAPS Rating: ****

Advertisement