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Tech Stocks: The Wind Beneath the Dow's Wings

By Jessica Alling - Apr 10, 2013 at 12:00PM

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A second day of tech stocks boosting the index to new heights.

New records galore: After a quick dip yesterday morning, the Dow Jones Industrial Average (^DJI -0.42%) gained 60 points to close at a new all-time high -- and it wasn't done there. Up 115 points as of 11 a.m. EDT, the index is gaining from positive housing market news and the FOMC's latest meeting minutes, as well as some international economic signs. Not to mention the fleet of big-time tech players on the move this morning.

After disclosing a disappointing 4% drop last week, the Mortgage Bankers Association reported that mortgage and refinancing loan applications were up 4.5% during the previous week. This is great news to investors who have been continually disappointed by more and more signs of a weakening labor market. Since the housing and labor markets are so closely tied with the performance of the overall economy, it's important that at least one of them continues to gain momentum as the other dips.

Released five hours early, the FOMC's most recent meeting minutes gave investors some positive reinforcement as it showed most members in favor of continuing the current QE policy through the middle of the year. The last release of minutes caused most banks to stutter when it revealed that more and more committee members were concerned with the cost of continuing the current policy, and though it appeared that there was a similar case this time, it didn't seem to worry investors as much. Later today, details of the March federal budget will be released.

Overseas, China reported an increase in imports and exports, signaling new opportunities for international trade. Imports were up 14.1%, while exports were up 10%.

This morning's highfliers
Tech stocks are flying high again today, with Cisco (CSCO -0.62%) taking the lead as the stock jumped 2.5% this morning. Hand in hand with Cisco is Microsoft (MSFT 1.26%), up 2.03%, as the two announce some joint projects to help IT customers. The companies will join Cisco's Unified Data Center architecture with Microsoft's Fast Track solutions to help reduce complexity and improve functionality for its data center customers. The two are also developing solutions for sellers of the current products to work jointly as a way to expand the data center business operations.

Intel (INTC 0.96%) is also on the rise, with a 3.06% gain. The chip maker is making solid gains into the Chinese mobile market, with the second phone to feature its CloverTrail+ Atom processor debuting at Beijing's 2013 IDF. The ZTE Geek (yep, you read that right) is the newest phone to feature the Intel processor, following the Lenovo K900, which scored big in early comparisons over other processors. With its foot in the door and positive feedback so far, Intel is on its way to becoming a true player in the mobile market -- though it still has some catching up to do.

IBM (IBM -2.48%) is the tech laggard today, though the company is up 1.34% as of this writing. Analysts at UBS upgraded the company today from neutral to buy, with a $25 bump to its target price, now set at $235. The upgrade was due to the belief that IBM is well positioned for the coming computing transition: With integrated vendors, the transition will be relatively smooth; the majority of new computing will be cloud-based, which is an IBM strength; and the company's hosting capabilities plus OpenStack support will be helpful as computing continues to evolve.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$30,967.82 (-0.42%) $-129.44
International Business Machines Corporation Stock Quote
International Business Machines Corporation
$137.62 (-2.48%) $-3.50
Intel Corporation Stock Quote
Intel Corporation
$36.69 (0.96%) $0.35
Microsoft Corporation Stock Quote
Microsoft Corporation
$262.85 (1.26%) $3.27
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
$41.96 (-0.62%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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