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

The blue chips had another solid day today as Microsoft jumped on iPad-related rumors. Meanwhile Wal-Mart said it would enter the used video-game business, forcing GameStop shares lower.

Mar 18, 2014 at 10:00PM
Longview

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.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of GameStop and Microsoft. Try any of our Foolish newsletter services free for 30 days. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers