Stock markets surged higher this morning on stronger-than-expected economic data. The S&P/Case-Shiller 20-city composite index showed a 10.9% rise in home prices over the past year — the largest jump since April 2006. Further, the Consumer Confidence Index also jumped to a five-year high of 76.2 in May from 69 last month. These two indicators are extremely important to the economy and should help drive economic growth in the second half of the year.
Stocks surged in early trading after the data was announced, but markets cooled off slightly as the day went on. As of 3:20 p.m. EDT the Dow Jones Industrial Average is up 0.75%, while the S&P 500 has advanced 0.65%.
Microsoft Corporation (NASDAQ:MSFT) is one of the Dow’s leaders today, rising 1.8%. IDC released a report predicting a 7.8% drop in PC sales this year, but it didn’t predict an outright disaster for the PC in the long term. In 2014, shipments are expected to fall 1.2% from 321.9 million this year, but volume is expected to recover to 333 million units in 2017. The PC refresh cycle has changed dramatically in recent years because PCs last longer than ever before. That’s keeping consumers from upgrading to Windows 8, but in the long term, IDC doesn’t think they’ll give up PCs altogether.
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Two giant telecoms are lagging the Dow by a wide margin as Google Inc (NASDAQ:GOOG) attempts to upend the market. AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) are down 1.2% and 0.9%, respectively, as Google Fiber gains more attention from investors and analysts. Analyst Carlos Kirjner at Bernstein said today that while AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) don’t have to worry about their dominant positions being upended in the near term, Google Fiber could eventually upend the entire industry.
I think we’re making a mountain out of a mole hill today, and until Google Inc (NASDAQ:GOOG) sees success in its initial markets, neither AT&T nor Verizon has anything to worry about. We’ve seen market-changing promises like free Internet from Google Inc (NASDAQ:GOOG) before, but they have yet to hit the market with a wildly successful product. It will take a lot to overthrow the established telecom industry, and my money is on the entrenched players until Google Inc (NASDAQ:GOOG) proves its worth in fiber.
The article Telecoms Lag the Market’s Gains on Threat From Google originally appeared on Fool.com.
Fool contributor Travis Hoium manages an account that owns shares of Microsoft. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft.
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