In any long bull market, various sectors of the stock market move in and out of favor. Even as the Dow Jones Industrial Average (INDEXDJX:.DJI) and other, broader measures seem to move smoothly higher over time, their individual components often ebb and flow in currents and countercurrents that reflect changing investor sentiment. Today’s jump in the Dow reflects such a change, as the average managed to shrug off the early release of the Fed’s FOMC meeting minutes and the suggestion that the Fed might slow its quantitative-easing program. By 10:55 a.m. EDT, the Dow was up 106 points to a new record, while the S&P 500 (INDEXSP:.INX) had hit a new intraday all-time high as well.
Looking at the biggest gainers in the Dow, you’ll see Cisco Systems, Inc. (NASDAQ:CSCO) , Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT) all near the top of the list with gains of more than 2%. What all three of those tech stocks have in common is that their valuations are extremely inexpensive in comparison to the rest of the Dow Jones Industrial Average (INDEXDJX:.DJI), and value investors have finally started to pick up on that fact as they look for ways to protect themselves from a potential stock-market correction.
Of course, positive news also helped send these stocks higher. Intel jumped after climbing 3% yesterday after its mobile-chip infrastructure ended up included in Hewlett-Packard‘s Moonshot server systems. Given concerns about Intel’s mobile capacity, the announcement helped to dispel fears about the chip giant’s future. Meanwhile, Microsoft took its own steps to boost its mobile growth, joining a group of companies putting pressure on European regulators to fight Google Inc (NASDAQ:GOOG) and the mobile-search practices of its Android devices. And while Cisco Systems, Inc. (NASDAQ:CSCO) had little direct news, its two-day rise shows how closely linked the prospects of major tech companies are in the current market.
Big tech stocks have seen their leadership positions endangered for a long time, and many investors have held back from buying them despite their value proposition. If that reluctance turns into enthusiasm, then tech stocks could end up sending the Dow Jones Industrial Average (INDEXDJX:.DJI) higher, extending the already long-lived bull market for a while longer.
The article Tech Stocks Have the Dow Record-Bound Again originally appeared on Fool.com is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Cisco Systems, Google, and Intel. The Motley Fool owns shares of Google, Intel, and Microsoft.
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