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Investors Ignore Russia for U.S. Housing Data, While Microsoft and Nasdaq Make Headlines

By Jack Kramer and Nick Martell – Mar 18, 2014 at 11:00PM

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Good morning, good lookin'. Here are the three things you need to know on March 19.

Russia has opened its arms to Crimea to bail on Ukraine and join its empire -- and the market shrugged off threats of economic disruption (again). The Dow Jones Industrial Average (^DJI 1.01%) rose 102 points Tuesday, adding some muscle to Monday's big 182-point win.

1. Microsoft rises as blogs expect iPad-friendly Office software announcement
Microsoft is ending the war against iPads by finally creating a tablet option for its bread-and-butter software line Microsoft Office. According to multiple reports on tech blogs, new CEO Satya Nadella has decided if you can't beat em, join em. Apple's (AAPL -0.14%) iPads are here to stay, and he wants to start making money off them.

While Windows OS continues to struggle as consumers shift from traditional PCs to tablets, which mostly run on Apple and Google software, they're trying to adapt with Office Suite software. The company is expected to announce a new version compatible with Apple tablets. The news means that Microsoft (MSFT -2.14%) may finally capture the lost potential revenues sacrificed during its stubborn iWar against Apple. Microsoft rallied 4% during the day to the highest level since 2000.

Office is a product line that makes you desperate to finally leave the office. Word, Excel, and PowerPoint are products known by people with desk jobs all over the world. Office is also Microsoft's trusted and true "cash cow," consistently bringing the bacon to the most mature tech company ever seen.

2. Nasdaq stock exchange falls after investigation into high-frequency trading
It's just not fair! Those were the words from New York Attorney General Eric Schneiderman Tuesday as he announced he was investigating the Nasdaq (NDAQ 0.14%) stock exchange. Schneiderman is seeking to eliminate "unfair advantages" that algorithm-driven computers called "High Frequency Traders," or HFTs, enjoy.

When Netflix announced House of Cards, a savvy trader picked up the phone, called his trader, and bought Netflix stock. An even savvier trader did it online. MarketSnacks did it via Twitter (the savviest). The problem is that high-frequency traders can beat everyone because of access to internal broadband and direct connections to stock exchanges like the Nasdaq. HFT firms will make more return since they make the trades at more favorable prices than the rest. It's that tenth of a second that counts.

HFT firms trade hundreds or thousands of times per day for their own accounts, and are a major topic since the major indexes had a "flash crash" in 2010 caused by glitches in trading algorithms. The Nasdaq handles stock trading for tons of publicly listed companies, and the focus from Schneiderman made investors worry. The stock slipped 3%.

3. Homebuilding starts rebounding from winter cold
For the third straight month, housing starts (aka the beginning of construction on a new residential building) fell, slipping by 0.2% in February to an annualized rate of 907,000 units -- that's fresh after January's housing starts plummeted by more than 11% while the frostbite-conducive weather deterred much building from going on nationwide.

So why aren't investors worried? Because while housing starts rebounded some, "building permits" jumped by 7.7% in February, according to the same report. Building permits are a sign of future construction to investors -- and we assume all the upcoming 20-year-old NFL draft picks signing absurd million-dollar contracts will only boost the figure further.

Remember the housing market drives household wealth and also drives sales for homebuilders' construction companies -- and Home Depot and Lowe's. When homes are booming, so is the U.S. economy. Let's just leave it at that.


  • The Federal Reserve's two-day policy meeting ends
  • Fourth-quarter earnings: FedEx

MarketSnacks Fact of the Day: China and India have the highest marriage rates in the world, while the Czech Republic has the highest divorce rate.

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Jack Kramer and Nick Martell have no position in any stocks mentioned. The Motley Fool recommends Apple, FedEx, Google, Home Depot, Netflix, and Twitter and owns shares of Apple, Google, Microsoft, and Netflix. 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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