The Dow Jones Industrial Average (^DJI -0.11%) was little changed early on Friday, up only three points as of 11:30 a.m. EST. The lack of economic releases allowed investors to focus on particular stocks.

That gain came despite the sharp drop in shares of Dow component Intel (INTC 0.64%). Cable stocks, however, enjoyed strong gains. Time Warner Cable (NYSE: TWC) and Cablevision (NYSE: CVC) rose dramatically, as the possibility of industry consolidation looked ever more likely.

Intel admits mistakes
Intel shares plunged nearly 5% in early trading Friday, following the company's analyst day. At that meeting, Intel's chairman admitted that the chip maker had "lost its way," failing to capitalize on the demand for mobile computing devices.

Still, Intel believes it can rebound. In particular, the company believes consumers will be drawn back to Intel-based PCs that offer detachable tablet-like screens and other features. It also thinks there will be strong demand for servers as businesses build their own cloud infrastructure.

Investors, however, don't seem to be buying it. They could be latching on to the company's revenue projections -- Intel expects revenue to be flat next year, while analysts had been looking for a 1.4% gain.

A bidding war for Time Warner Cable?
While Intel's shareholders are losing on Friday, Time Warner Cable investors are enjoying a big rally. The company is up more than 8% as reports indicate that it could soon be the subject of a bidding war.

Charter Communications is close to finalizing a deal that would give it the cash to purchase Time Warner Cable, according to The Wall Street Journal. Liberty Media owns a large stake in Charter, and Liberty Chairman John Malone has been explicitly open about his desire to see the cable industry consolidate.

But Charter isn't the only company interested in buying Time Warner Cable. CNBC reported that Comcast has spoken to the FCC about whether regulators would oppose a possible merger. Comcast is already one of the largest providers of paid-TV in the U.S.; merging with Charter would give it control of a vast swath of the industry.

Cablevision could also be acquired
Cablevision seems to be benefiting from the move in Time Warner Cable. There have been no reports that Cablevision would be acquired, but there has been been widespread speculation that it would eventually be bought by a larger company.

Hedge fund manager John Paulson owns a big stake in Cablevision, and said back in July that he thought the company would be acquired. Cablevision is a smaller, regional player compared to Time Warner, but would thus be easier to buy.

As the cost of content continues to increase, industry consolidation is looking more likely. By merging, and thus reducing the number of paid-TV providers, cable companies would be able to muscle content creators into cutting costs. Time Warner Cable fought a protracted battle with CBS this summer as it attempted to resist CBS' demands for more money.