A surprising rise in consumer confidence has the Dow Jones Industrial Average popping 0.65% higher today, and major tech stocks are leading the way.
The Conference Board said that its consumer confidence reading was up from 78.3 in February to 82.3 in March, the highest level in six years. Consumers drive 70% of the U.S. economy, so this is a key reading for future economic growth.
In the housing market, the S&P/Case-Shiller index for property values in 20 cities rose 13.2% year over year, another strong sign that the housing market is recovering. I'd expect to see growth slow in 2014 as interest rates rise, but when combined with more confident consumers a strong housing market can be a big driver to employment gains and GDP growth.
Tech makes a splash
Cisco and IBM are often overlooked tech stocks, but they're leading the Dow higher today with respective climbs of 3.2% and 3.7%.
Cisco yesterday promised to spend $1 billion on an "Intercloud," a cloud offering similar to what Amazon.com and Google provide today. The goal is to offer the ability to store, run, and integrate software within the cloud; this isn't new, but Cisco hopes to leverage its networking expertise and security software to gain share.
Senior Vice President for Cloud Sales Nick Earle said one driver of the move is fear of spying by agencies such as the National Security Agency. It's too early to tell if this investment will pay off, or if Cisco can compete effectively with more established players, but "cloud" is the buzzword of the year and that's what investors are excited about today.
On IBM's side, fellow Fool Anders Bylund pointed out three important releases today, but the most important may be announcement of a data collection and analysis framework with French automaker Peugeot Citroen. The deal is part of the Internet of Things and could help improve auto performance and safety, and potentially lead to self-driving cars.
IBM is out in front of the move toward even more data collection; it's one of the tech giants with the ability to collect and aggregate data from devices on a large scale.
Companies such as Cisco and IBM will be key players in the Internet of Things and are worth keeping tabs on for their value and dividends, as well as for their life-transforming technologies.
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The article Today's Stock Market: Confidence is Up and so is Big Tech originally appeared on Fool.com.Travis Hoium manages an account that owns shares of Cisco Systems. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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