Morning Dow Report: Merck, Cisco Soar; Microsoft Facing Cracked Windows?

Even big gains from Merck and Cisco Systems didn't result in a big rise for the Dow on Monday, as investors wait for earnings season to hit full stride this week. Find out why Microsoft fell behind the Dow this morning.

Jan 13, 2014 at 11:00AM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Earnings season officially began last week, but the quarter really hits its stride this week as major banks give their view on the overall state of the economy. Meanwhile, investors appear to be in a wait-and-see mode once more, as the Dow Jones Industrials (DJINDICES:^DJI) were down five points as of 11 a.m. EST despite seeing big upward moves from Merck (NYSE:MRK) and Cisco Systems (NASDAQ:CSCO). Weighing against those gains were losses from Microsoft (NASDAQ:MSFT), while the relatively low share prices that Merck and Cisco command limited their impact on the price-weighted index.

Merck soared 5.5% after reporting several pieces of encouraging news. A preliminary FDA review of clinical-trial data gave further evidence that the blood-clot medication vorapaxar would likely gain the backing of an advisory panel this week and then agency approval in the near future. But investors also applauded Merck's further exploration of strategic options for its animal-health and consumer-care businesses, with the company saying it expects to complete the review process and take action this year. With many peers having taken similar action, Merck could unlock shareholder value as a result of anticipated moves.

Cisco climbed 2.3% after a positive article in Barron's over the weekend pointed to the potential for the networking giant to produce 20% returns despite facing competitive pressures. Yet interestingly, the article acknowledged the ongoing threat of technology such as software-defined networks, which could arguably render much of the hardware-based solutions that make up Cisco's bread-and-butter business obsolete in the long run. Given how much Cisco has been beaten down lately, a rebound isn't all that surprising, but investors have suffered disappointment before even after similarly hopeful bounces.

Microsoft fell 1% after dealing with speculation about the rumored future release of a Windows 9 reboot of its staple operating system software in early 2015. With so many alternatives to Windows becoming available, for mobile devices and for traditional computers, Microsoft could be losing its grip on what has been a decades-long cash cow. The challenges only make it that much more important for Microsoft to find a worthy successor to CEO Steve Ballmer and start making the tough strategic choices that will help the company best exploit its potential and its extensive financial resources.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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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