These Gainers Bucked the Falling Dow

The other half of the popular "Sell in May" axiom is to buy stocks back in November. Yet that's been a lousy strategy so far this month, as the Dow Jones Industrials (INDEX: ^DJI  ) are down well over 4% so far in November and off more than 1,000 points from their mid-October highs. Moreover, even if you think stocks are bound to recover eventually, the fact that the Dow is still up 300 points for the year puts the recent downturn into perspective and shows that stocks could have further to fall if the negative factors affecting the markets don't go away soon.

Yet although the Dow is down about 34 points as of 1:20 p.m. EST, about a dozen Dow components managed to gain ground on the day. Leading the way was Cisco Systems (Nasdaq: CSCO  ) , climbing another 2% following a strong earnings report yesterday. The company said it would buy cloud-software company Cloupia for $125 million, but what's really leading the stock higher is the fact that rival NetApp (Nasdaq: NTAP  ) posted strong quarterly earnings. That supports the case that the entire industry really may be on a clearer road to recovery, reassuring those who may have worried that Cisco's results were an anomaly.

Bank of America (NYSE: BAC  ) climbed 1.6% as the bank reached the halfway point in providing $7.6 billion in relief efforts to mortgage borrowers who owe more than their homes are worth. Putting the financial crisis behind it is a key step for B of A in its efforts to move forward and regain its reputation for stability and profitability in a new economic environment for financial stocks.

Finally, Intel (Nasdaq: INTC  ) rose almost 1%. Despite the short-term gain, the long-term picture for Intel remains cloudier than ever due to mixed results from the new Windows 8 operating system. With Intel's core PC market relying largely on Windows-driven machines, slow sales of the operating system could spell trouble for Intel as well.

Keep on winning
Of the three Dow stocks mentioned above, Cisco arguably has the most opportunities moving forward. With connectivity remaining a key element of technology, the company has the inside track on many potentially profitable ventures. But after big gains in the past couple of days, is Cisco still a buy? Get the lowdown on the routing juggernaut in The Motley Fool's premium report, which has you covered with a full year of free analyst updates to keep you informed as its story changes, so click here now to read more.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 15, 2012, at 5:20 PM, omahasandman wrote:

    I don't expect stabilization of this area any time soon, but rather consolidation of the players, especially those focused on the data center. Equipment is getting much more efficient across all parts of the data center, and across data centers. Lastly, the article mentions that NetApp is a rival, but they are in fact a partner of Cisco's (FlexPod architecture). This may be one area of consolidation to look for, as EMC take aggressive steps of their own to lock horns with Cisco (purchase of Nicera). It wouldn't surprise me if Cisco bought NetApp in the next 6 months, or sooner. Timing is right.

Add your comment.

DocumentId: 2115240, ~/Articles/ArticleHandler.aspx, 4/23/2014 7:07:51 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement