Cisco, Big Pharma Lead the Dow's Pop

Markets have a big day as consumer confidence data surprises.

Mar 25, 2014 at 2:30PM
Daily Fool

After losing steam in the late morning, the markets have roared back in afternoon trading on the back of well-received economic data. The Dow Jones Industrial Average (DJINDICES:^DJI) had gained nearly 100 points as of 2:30 p.m. EDT. Tech giant Cisco (NASDAQ:CSCO) ranks among the Dow's best stocks today in gaining more than 3.3%, while Big Pharmas Merck (NYSE:MRK) and Pfizer (NYSE:PFE) have bounced back from yesterday's losses behind welcome news. Let's catch up on what you need to know.

Consumer confidence jumps and Cisco seeks answers
The Conference Board's measure of consumer confidence jumped by a full 4 percentage points to 82.3 in March. That's far better than economists had projected and speaks well of consumers bouncing back from the harsh winter. It's a particularly good sign especially for retailers, which have endured a painful sting from the recession's aftermath and haven't found any traction with the winter weather that kept shoppers away in recent months.

Cisco Logo

Source: Wikimedia Commons

Few blue-chip stocks are moving like tech's Cisco today. Investors have rallied behind the company's $1 billion plan to launch its own cloud computing services, seeking to carve out a piece of a competitive but up-and-coming niche. The opportunity is huge for Cisco. Cloud computing leader (NASDAQ:AMZN) has reaped billions of dollars in annual revenue from its cloud services, according to analyst estimates. If Cisco can replicate even a fraction of that success, it'll breathe fire into what's become a downward trend in this network specialist's financial performance. Cisco's leadership expects further falling revenue in the current quarter, and taking advantage of the cloud's power to bring in sales would help the company right the ship in the long term.

Meanwhile, Merck's stock has gained 2.5% to rank among the top Dow members of the day. The company's aim to sell off its consumer health business has received a warm welcome on Wall Street, and Merck won another boost today on reports that French pharma rival Sanofi is looking to enter the race for the purchase of the business. Analysts believe that Merck's unit could earn up to $12 billion for the division, and that's great news for this company's investors. While Merck's stock has done well lately, flagging sales and so-so pipeline have left investors twisting. Refocusing on its core businesses and earning a big reward from this sale is the best outcome for Merck and its investors.

Rival Pfizer is making waves today as well, with the stock up 1.2% so far. Pfizer's lung cancer drug Xalkori, which was first approved by regulators back in 2011, hit another big mark today after the company announced that the therapy beat chemotherapy in holding off progression of lung cancer for a trial of previously untreated patients. That's a huge win for this up-and-coming drug's outlook. Xalkori already makes more than $300 million in annual sales, but analysts believe that it could become a blockbuster with possibly more than $1 billion in annual revenue in the near future. Today's stellar results should help Xalkori add to Pfizer's strong portfolio moving ahead.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends and Cisco Systems. The Motley Fool owns shares of 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.

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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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