Why Microsoft Bucked a Down Dow Today

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is down 0.4% today in an up-and-down day for the market. The Federal Reserve's Beige Book report was released midday and, despite a positive sentiment from the Fed, the market still sold off. Some of that may be a short-term reaction to an increased potential of tapering, which is seen as a negative for stocks.

I think the positive data the Fed is seeing will be good for the economy long term, which will eventually make its way to the market, even if it hasn't today.

The Dow's losses are widespread, with 26 of 30 components in the red today. One company that isn't is Microsoft  (NASDAQ: MSFT  ) , which has risen 1.1% as I'm writing.

Microsoft and Nokia move closer to a deal
Microsoft was driven by the European Commission, the EU's antitrust regulator, giving its blessing of Microsoft's acquisition of Nokia's handset business. The U.S. Department of Justice has also approved the deal, and we can probably expect it to close early next year. 

Now the rubber really hits the road for Microsoft. The Nokia deal is supposed to help Microsoft become a bigger rival to Apple and Google in the smartphone business.

There are early signs that Microsoft's strategy may be working. Gartner's Q3 data had Microsoft increasing market share from 2.3% a year ago to 3.6%. It sold more than twice as many units in the quarter, as well.

Can Microsoft get hardware right
Long term, the question, can Microsoft can get hardware right?

The Surface has been a decent success, but certainly isn't taking the world by storm the way the iPad did. The Xbox One has gotten mixed reviews; and then there's the memory of Zune.

It's no guarantee that Microsoft will become a top-notch hardware company, but I don't think it has a choice. Windows 8 needed a starting point to attract other manufacturers, and Nokia was the best way to do that.

For today, that's enough for investors to cheer for; but long term, there are a lot of unknowns.

Stocks for forever
Microsoft has been a great stock for decades, and if you're looking for similar long-term opportunities, our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 


Read/Post Comments (0) | Recommend This Article (3)

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.

DocumentId: 2752470, ~/Articles/ArticleHandler.aspx, 7/31/2014 4:05:40 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...


Advertisement