Take The Long View

The Dow Jones Industrial Average (DJINDICES:^DJI) was up 0.13% in a quiet Friday afternoon trading session. This follows two consecutive days of losses that left the Dow on track for a down week.

Intel gains on ... PCs?!
The Dow was led by chipmaker Intel (NASDAQ:INTC), which was up nearly 7% at lunchtime. The strong movement followed the company's updated guidance last night for its second quarter and full year that showed healthier numbers on stronger than expected demand for business PCs.

Intel now expects to see revenue grow this year, instead of the "mostly flat" top-line expectation previously announced. The company projects second-quarter revenue of $13.7 billion, up from a ranged estimate of $12.5 billion to $13.5 billion.

Intel Logo

Source: Company website.

Company management wasn't finished with the good news there, either: Gross margin is now expected to come at a higher than expected 64% thanks to increases in unit sales and lower costs.

The gains sent Intel stock to a 10-year high, though this high is not even in the same ballpark as the company's all-time record during the tech bubble in 2001.

INTC Chart

INTC data by YCharts.

The news has lifted the entire PC industry
The market reaction to the announcement spread quickly to others in the PC arena. 

Microsoft (NASDAQ:MSFT) gained over 1.7%, as an increase in PC sales also implies an increase in the company's PC software. This gain continues what has been a good year for Microsoft, as investors have applauded the company's new CEO and its shift in focus to cloud-based products for the next generation of business and personal productivity software.

Microsoft is up nearly 10% year to date, outpacing the Dow's 1.1% gain and the S&P 500's (SNPINDEX:^GSPC) 4.6% rise.

Microsoft Windows Fool Flickr

Hewlett-Packard (NYSE:HPQ) gained 4.5% this as investors recognized that higher PC chip sales at Intel also mean higher sales at PC makers.

HP is up 24% year to date, beating the S&P by a factor of five and crushing the Dow's meager gain. 

HP's rise has primarily been driven by outperformance from CEO Meg Whitman and her management team. Just yesterday, Goldman Sachs upgraded the stock from sell to neutral, primarily based on the company's improved cost structure and cash flow. The analyst raised his expectations for profits, but remained cautious as to revenue growth. 

The news from Intel today may indicate that revenue is on the rise at the company as well.

Cautious optimism
The PC industry remains under tremendous pressure. Mobile computing, new devices, and new technologies are waging war on multiple fronts against the entrenched establishments. The news from Intel today may spark hope for the short term, but the long-term viability of these investments demands that they adapt and evolve.

Today's movements are clearly positive for the established players, but whether this optimism is sustainable remains to be seen.

Jay Jenkins has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Microsoft. 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.