Dow Sets Another Record on Strong Economic Data

With Cyprus now safely in the rearview window, stocks returned to their usual winning ways today. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) gained 112 points, or 0.8%, boosted by some strong economic reports to set yet another all-time closing high. The S&P 500 also finished within two points of a record close, ending at 1,563.

Among the reports pushing stocks higher were a better-than-expected increase in durable orders and exceptionally strong growth in housing prices. Overall, orders for long-lasting products increased 5.7% in February, better than projections of 3.8%, and up from a drop of 3.8% in January. The increase was led by a jump in commercial aircraft purchases, but factoring out the more volatile transportation sector, however, orders fell 0.5%. The Case-Shiller 20-City Index, meanwhile, showed its biggest increase in housing prices in six years as prices jumped 8.1% from a year ago, and home values went up in all 20 metropolitan areas that the index tracks.

The consistently strong economic data seems to have convinced investors that the bull market will continue for the long haul, though there were a couple of reports today that came in below expectations. Consumer confidence dropped all the way to 59.7 from 68.0 in February, as fears of sequestration seem to have worn on average Americans. New-home sales for February were also lower than expected at 411,000 versus 426,000.

On the Dow today, Intel (NASDAQ: INTC  ) led all comers, gaining 2.9% after word broke that the chipmaker was in talks with Time Warner and Viacom for the rights to TV shows and movies that would allow it to start its own online pay-TV service. Intel would produce its own set-top box, which could be out by the end of the year, shaking up the video wars as the tech heavyweight would be putting its capital up against the likes of Comcast, DirecTV, and Netflix (Nasdaq: NFLX). The service would be delivered through users' broadband connections and would offer subscribers more of an a la carte service rather than a full complement of channels that cable and satellite providers offer, allowing subscribers to choose what channels they like.

Boeing (NYSE: BA  ) shares were also up 2.1%, benefiting from the strong improvement in durable-goods orders as well as the first successful flight of a Dreamliner jet after the new models were grounded because of battery fires. Boeing said it hopes the Dreamliner fleet will be back in the skies within weeks, but after hours the possibility arose that the FAA could impose a temporary limit on the jet's range, potentially making ocean crossings impossible, the original intent of the long-haul plane.

Outside the Dow, Netflix (NASDAQ: NFLX  ) jumped 5.4% after Pacific Crest Securities upped its price target on the home-video entertainer to $225 from $160. Analyst Andy Hargreaves pointed out that Netflix's trove of subscriber data gives it a competitive advantage in generating original content and purchasing outside content, since it has more access to user preferences than its competitors. He also saw a strong opportunity overseas and predicted it would have 53 million total streaming subscribers by 2015, up from 33 million today.

When it comes to dominating markets, it doesn't get much better than Intel's position in the PC microprocessor arena. However, that market is maturing, and Intel finds itself in a precarious situation longer term if it doesn't find new avenues for growth. In this premium research report on Intel, our analyst runs through all of the key topics investors should understand about the chip giant. Click here now to learn more.


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