The Dow and S&P 500 Eye Fresh All-Time Highs at Midday: Is the Rally Back On?

Markets rise on mediocre but positive economic news, with Intuitive Surgical and Cisco leading the way.

Apr 1, 2014 at 12:11PM

The Dow Jones Industrial Average (DJINDICES:^DJI) continues to nudge higher today, and shortly before noon its 0.4% gain put the index within striking distance of the all-time closing high of 16,576.66 set on the last day of 2013. The S&P 500 (SNPINDEX:^GSPC) was also up 0.4% at lunchtime, hitting a record high of 1,884.60; it remains to be seen whether this new record will hold up for the rest of the day, as both indexes have been slipping from an early peak. The S&P's last record was 1,878.04 points, set in early March.


The big news today came from the Institute for Supply Management's factory-activity index, which continues to show expansion (a reading over 50) with a 53.7 reading for March, above February's result of 53.2. Markit's Manufacturing Purchasing Managers Index fell to 55.5 in March from 57.1 in February, but that's still solidly in expansionary territory. Automakers Ford and Toyota both reported good monthly sales growth for March, with respective upticks of 3.4% and 5%.

The Dow's components are wavering between strength and weakness heading into the afternoon, with several trading near breakeven and 13 of the 30 components in the red. The Dow's early leader is Cisco Systems (NASDAQ:CSCO), which was trading up 1.9% at lunchtime, while Disney (NYSE:DIS) was hot on Cisco's heels with a 1.5% gain. Neither stock is trading on any real news, although Cisco Vice President of Corporate Technology Maciej Kranz  promoted the company's Internet of Things initiatives earlier this morning at a tech conference in Boston. Disney's Frozen recently became the top-grossing animated film of all time, and the entertainment conglomerate is also in the news for its acquisition of YouTube-native Maker Studios, which could cost nearly $1 billion if the deal's earn-out targets are reached. One of those news bites is noteworthy, but the other appears merely buzzworthy at first glance.


Source: Wikimedia Commons.

Approximately 300 of the S&P's 500 stocks were in the green today, and none was enjoying a bigger pop than robotic-surgery pioneer Intuitive Surgical (NASDAQ:ISRG). Intuitive's 8.2% gain is nearly double that of the second-best-performing S&P 500 component, and this pop does have good news behind it -- the FDA approved a new da Vinci surgical robot that is more advanced than earlier versions. Intuitive CEO Gary Guthart  was cited in the company's press release as saying, "The da Vinci Xi System's new overhead architecture means that multi-quadrant surgery can be performed without repositioning the system, an innovation long sought by surgeons who perform complex procedures."

This new da Vinci could result in "at least 575" new system sales, according to ISI Group analyst Vijay Kumar. That's no chump change for Intuitive, which has an installed base of roughly 2,585 da Vinci systems at costs ranging from $1 million to $2.3 million apiece, not including service agreements, accessories, and instrument costs.

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Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.

The Motley Fool recommends Cisco Systems, Ford, Intuitive Surgical, and Walt Disney. The Motley Fool owns shares of Ford, Intuitive Surgical, and Walt Disney. 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.")

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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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