The Dow Jones Industrial Average (DJINDICES: ^DJI ) had another good week, surging 207 points, or a cool 1.24%, after nonfarm payroll employment rose by 217,000 in May, largely in-line with a 218,000 consensus. Unemployment remained unchanged at 6.3%. This week, Intel (NASDAQ: INTC ) outperformed the Dow while telecom giants Verizon (NYSE: VZ ) and AT&T (NYSE: T ) slumped.
Intel ticked up 3.11% for the week, with the gains probably attributable to the company's strong showing at the Computex trade-show in Taipei, Taiwan. Intel demonstrated design wins in a number of attractive tablets, reassuring investors that the company was on track to hit its goal of shipping at least 40 million tablet chips by the end of the year. The company also highlighted a new product family, known as Core M, intended to bring the company's high performance processors into sleek fanless tablets and convertibles. While the company still has a way to go, the progress so far appears compelling.
This wasn't a good week for the telecom giants after AT&T guided for its wireless service revenues to be flat in the coming quarter. Further, the telecom giant expects that EBITDA margins for its wireless services to come under pressure on a year-over-year basis because of a shift to increased sales activity and a robust movement to no-device-subsidy Mobile Share Value plans. All told, AT&T raised full-year revenue guidance to about 5% for 2014, with earnings per share at the low end of the mid-single digit (5%-7%) range, so despite "disappointing" results, it is hardly cause for alarm.
Verizon, which recently benefited from the disclosure that Warren Buffett's Berkshire Hathaway and Dan Loeb's Third Point LLC hold significant equity stakes in the company, saw its shares slump slumped in sympathy with AT&T following its report. Agitating matters a bit is a PR drama that Netflix (NASDAQ: NFLX ) began. Netflix has been displaying error messages blaming Verizon's broadband service for unusually slow streaming of Netflix content, much to the chagrin of the telecommunications giant. Verizon has ordered a cease-and-desist, but Netflix insists that it's only trying to provide customers with more information about their Internet services.
With Intel making fresh 52-week highs and close to multi-year highs, it would appear that investors are pleased with the company's mobile efforts and are feeling much more comfortable about the PC market, which has been in decline for the past few years. Further, despite this week's under-performance from AT&T and Verizon, these companies still provide hefty dividend yields (5.25% and 4.29%, respectively) and solid underlying businesses, so it's probably not yet time to panic!
Leaked: Apple's next smart device (warning -- it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee that its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are even claiming that its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts that 485 million of these devices will be sold per year. But one small company makes this gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and to see Apple's newest smart gizmo, just click here!