Microsoft Corporation Leads the Dow as Investors Cheer More of Yellen's Easy Money

Once again, the head of the Federal Reserve has given American stock markets a nice lift on an otherwise slow day. Fed Chairwoman Janet Yellen, speaking at the National Interagency Community Reinvestment Conference this morning, voiced unquestioned support for the easy-money policies begun under predecessor Ben Bernanke. In light of what Yellen called "considerable" slack in the job market, she and other Fed policymakers will likely stay the course for some time yet, even though the tapering of the Fed's bond-buying program appears set to continue until purchases end entirely later this year.

Major U.S. indices are up strongly in early trading in response to Yellen's comments -- the Dow Jones Industrial Average (DJINDICES: ^DJI  ) has risen 0.78% at 12:10 p.m. EDT and the S&P 500 (SNPINDEX: ^GSPC  )  was up 0.79%. All but two Dow components were trading higher, and approximately 425 of the S&P's 500 stocks were in the green. While no Dow component has broken away from the pack in gains, Microsoft (NASDAQ: MSFT  )  was again topping the blue-chip index's 30 stocks with a 2.8% improvement, continuing a run that began on Friday with the launch of Office for iPad. Micron Technology (NASDAQ: MU  ) led all S&P 500 components with a 7.8% gain in early afternoon, while Oracle (NYSE: ORCL  ) was the S&P's leading megacap gainer, as Larry Ellison's $175 billion database dominator was up 3% at lunchtime.

Microsoft's Office apps Word, Excel, and PowerPoint now hold the top three spots on iPad's free apps list, and that helped boost OneNote, a different Microsoft app that's not part of the core Office 365 suite, to fourth place. Users still have to pay a subscription fee to do anything beyond opening files on these apps, and the subscriptions aren't cheap at $9.99 a month, or $99 a year. Microsoft is giving Apple its typical 30% cut on App Store sales, which means that the net revenue to Microsoft is more like $6.99 a month, or $69 a year. Ten million subscriptions (that's an Office 365 subscription for roughly 5% of all iPads ever sold) would net Microsoft roughly $690 million. That's a bit less than 3% of what the company's business division  (which develops the Office suite) pulled in during the 2013 fiscal year. Sure, a new sales channel is nice, but Office for iPad probably isn't going to be a difference maker here.

Source: Matt Buchanan via Flickr.

Micron's up thanks to a recent inclusion on the Barron's 400 index, and positive comments abound for the memory maker in advance of its earnings report on Thursday. There isn't much in the way of real news here, but the stock certainly looks cheap heading into earnings despite doubling over the past year -- its P/E of 14 is one of the tech sector's lowest, and Micron's earnings per share and free cash flow have both been riding strong growth since bottoming out in 2012. Oracle is up on even less news, but it's nonetheless enjoying a Microsoft-led tech surge since the company behind Windows has indicated that it's likely to shift its attention away from Windows.

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