Microsoft Rumors Pump Up Dow, While Wal-Mart Threatens GameStop

Stocks surged for the second straight day today, making last week's slide a distant memory, as remarks from Russian President Vladimir Putin calmed markets. Putin said he did not wish to seize further parts of Ukraine, but still defied Western protests by formally declaring Crimea as part of Russia. Investors, however, seemed to be glad that the crisis is contained to the peninsular region for now as the Dow Jones Industrial Average  (DJINDICES: ^DJI  ) finished up 89 points or 0.6%, and the S&P 500 approached its record high once again, climbing 0.7%.

In other macroeconomic news, housing data was positive as February housing starts at 909,000 were roughly in line with estimates, but building permits, a leading indicator for the sector, jumped to 1.02 million, well ahead of January's total of 945,000 and better than expectations at 955,000. Data also showed that last month's Consumer Price Index increased 0.1%, indicating that inflation continues to be under control. 

Leading the blue chips' gains today was Microsoft  (NASDAQ: MSFT  ) , which jumped 4%, hitting $39.55, or its highest point since 2000. The jump came on rumors that the software giant would introduce a version of its Office suite. According to Reuters, new CEO Satya Nadella could make the announcement at a March 27 event. Investors reacted well to the news as Office is Microsoft's most profitable product, but the decision could undercut sales of Microsoft's own Surface tablet, which runs on Windows and comes with Office installed. Still, analysts estimate that the Windows-maker is forgoing $2.5 billion a year by not making Office for the iPad. Considering the Surface has undersold expectations, perhaps the iPad strategy is the better direction.

Elsewhere on the Dow, Wal-Mart  (NYSE: WMT  ) said it wanted to get into the used video game business. The retail giant said starting March 26 it will allow customers to trade in used video games for credit on purchases at Wal-Mart and Sam's Club stores. Wal-Mart said it would refurbish the old games and sell them in "like-new condition." Investors did not have a strong reaction to the news, as used video games are just a $2 billion business, and Wal-Mart's entry is unlikely to be meaningful to its bottom line. Shares moved up just 0.1%, but when the world's largest retailer enters a new business there are bound to be consequences. Shares of GameStop  (NYSE: GME  ) , the No. 1 retailer of new and used video games, fell as much as 6% and finished down 3.4% on the news. The effects of Wal-Mart's are unclear, but GameStop benefits from a smaller store format that is often more accessible and staff specialized in video games. Considering Best Buy and Target already offer such programs, I wouldn't expect the move to have an immediate impact on GameStop. 

Is Uncle Sam about to claim 40% of your hard-earned assets?
Thanks to a 2013 law called the American Taxpayer Relief Act, or ATRA, he can, and will, if you aren't properly prepared.

Fortunately, The Motley Fool recently uncovered an arsenal of little-known loopholes to protect yourself from ATRA and help keep the taxman at bay when he inevitably comes calling. We reveal them all in a brand-new special report. Simply click the following link for instant, 100% free access.


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: 2880893, ~/Articles/ArticleHandler.aspx, 11/26/2014 3:36:50 PM

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...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement