Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Microsoft Corporation (MSFT), Intel Corporation (INTC): Why the Dow Jones Industrial Average (.DJI) Exploded Higher Today and Tech Stocks Will Tank Tomorrow

Analysts and investors have been waiting for a pullback for weeks. Clearly, today wasn’t the day. After starting out slightly higher, the Dow Jones Industrial Average (DJINDICES:DJI) rocketed up as the morning progressed, finishing the day with a gain of 128 points, or 0.88%.

Microsoft Corporation (MSFT)

Given the triple-digit move, it’d be tempting to conclude that there was a huge positive impetus. But the reality is that it was more of a cumulative effect. In the first case, data from China showed that the country’s imports increased more than expected last month, suggesting that domestic demand in the world’s second-largest economy is picking up steam. As an analyst told Bloomberg News, “Chinese import numbers have got investors thinking that China has become successful at boosting domestic demand.”

In the U.S., meanwhile, the central bank released the minutes from its monetary policy meeting in March. The notes showed a growing sense of optimism among the participants, particularly when it came to housing. According to the minutes, “Meeting participants generally indicated that they viewed the economic data received during the intermeeting period as somewhat more positive than had been expected, but that fiscal policy appeared to have become more restrictive, leaving the outlook for the economy little changed on balance since the January meeting.”

It’s nevertheless important to note that these observations preceded last week’s disappointing jobs report. For the month of March, the Commerce Department reported that only 88,000 jobs were created. Economists were looking for a figure of 190,000 to 200,000. Either way, there’s little indication that the central bank is on the brink of reducing its ongoing quantitative easing programs, which are flooding the market with $85 billion each month and helping to keep long-term interest rates down.

What’s more important for tomorrow was a report issued after the bell by research firm IDC, which said that worldwide shipments of personal computers fell by 13.9% in the first quarter. Forbes summed it up with the headline “Worst PC sales drop in history.”

Shares of certain tech companies are taking it on the chin in afterhours trading. At the time of writing, Intel Corporation (NASDAQ:INTC) and Microsoft Corporation (NASDAQ:MSFT) were down 2% and Hewlett-Packard Company (NYSE:HPQ) was off by nearly 3%. According to The Wall Street Journal, “The grim estimate of 76.3 million units shipped is the latest sign that consumers are shifting their dollars to smartphones and tablets rather than PCs, while responses such as convertible laptops and Microsoft Corporation (NASDAQ:MSFT)’s touch-oriented Windows 8 operating system haven’t stemmed the cannibalization.”

With this in mind, it seems safe to assume that tomorrow could be rough for owners of these stocks.

The article Why the Dow Exploded Higher Today and Tech Stocks Will Tank Tomorrow originally appeared on and is written by John Maxfield.

John Maxfield owns shares of Intel. The Motley Fool recommends and owns shares of Intel and Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.