Why the Dow Almost Broke 17,000 Today

The blue chips hit another record high.

Jul 1, 2014 at 10:00PM

Boosted by strong economic data, stocks kicked off the second half the year by surging to record highs as the Dow Jones Industrial Average (DJINDICES:^DJI) nearly eclipsed the 17,000 milestone, reaching 16,998 at one point during the session. On the day, the blue chips moved up 129 points or 0.8%, and the S&P 500 also touched a new record, gaining 0.7%. The Nasdaq, meanwhile, jumped 1.1%. 

Economic reports out of both the U.S. and China had investors in a buying mood as Markit's Purchasing Managers Index for June reached 57.3, its highest level since May 2010. The monthly manufacturing report from the Institute of Supply Management was not as strong, as the index edged down slightly from 55.4 to 55.3 in June, below estimates at 55.8. Nonetheless, the index showed the 13th straight month of expansion and new orders and production were particularly high, a leading indicator for future activity. In China, meanwhile, another purchasing managers index showed activity flipping from contraction in May to expansion in June, increasing from 49.4 to 50.7, assuaging concerns about diminishing growth in China. 

Auto sales continued at a strong pace last month as sales industrywide rose 1.2% to 1.4 million in June or an annualized selling rate of 16.98 million. General Motors (NYSE:GM) shares jumped 3.6% on the news as sales ticked up 1%. The carmaker has been struggling recently with a seemingly endless stream of recalls, which caused sales of a number of affected models, including the Chevy Cruze, Malibu, and Impala to fall significantly last month. Still, overall the automaker didn't seem to be greatly affected by the negative publicity surrounding the recalls. Separately today, a chemical explosion at a GM metal-stamping plant in Indiana killed one worker and injured five. The incident didn't seem to affect the company's stock, but for a manufacturer already struggling with its safety record, news of the explosion will do it no favors.

After hours, Google (NASDAQ:GOOG) was shaking up the online music industry with its purchase of Songza, an Internet radio service similar to Pandora (NYSE:P). Shares of Pandora edged down 0.3% after hours on the news. The move gives Google, which did not disclose terms of the deal but was believed to spend just about $15 million, a stake in the burgeoning online radion industry, and follows Apple's $3 billion purchase of Beats Electronics just weeks ago. Songza recommends new songs to listeners, much in the way Pandora, and seems to fit with Google's knowledge-seeking business model. Amazon.com also recently entered the space with its Prime Music service, but Pandora has survived similar threats before, most notably from Apple's iTunes Radio. Despite the activity in the online radio space, the industry may approaching maturity with Pandora and Spotify the leading providers in the U.S. As the tech behemoths hunger for a foothold in the space, Pandora or Spotify could become a juicy acquisition for the big players like Apple, Google, and Amazon. 

Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

Jeremy Bowman owns shares of Apple and General Motors. The Motley Fool recommends Amazon.com, Apple, General Motors, Google (A and C shares), Pandora Media, and Tesla Motors and owns shares of Amazon.com, Apple, Google (A and C shares), Pandora Media, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. 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.

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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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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