Wednesday, January 30, 2013

Why Telecom Stocks Took the Dow Higher Today

These are interesting times in the smartphone market. Telecom investors are reaping the rewards of all this industry buzz: AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) are two of the Dow's top five gainers today.

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) is trading up in general, rising 0.5% as of 1:45 p.m. EST. But AT&T gained 2%, and Verizon jumped 1.3%, leaving all but a handful of Dow tickers firmly in the dust. Neither Ma Bell nor Big Red reported earnings last night -- they both got that item off the agenda last week.

No, the big telecom stocks are driven by frenzied sector interest today.

Former smartphone king Research In Motion (NASDAQ: RIMM  ) wants to reclaim that long-lost title, and it hopes to do it with a new line of BlackBerry 10 devices. The first wave of these will be unveiled tomorrow morning, and RIM investors have been licking their chops. Share prices may have fallen 14% over the last three days, but RIM is still a 30% gainer in the new year.

Apple (NASDAQ: AAPL  ) left investors disappointed last week, and the reigning king of high-end smartphones is down 10% in 2013. But today, Cupertino introduced a new spin on the full-sized iPad, this time with more storage and a higher price tag. Yes, both Verizon and AT&T will sell these new devices and take a cut of the profits.

^DJI data by YCharts.

Today's gains notwithstanding, the big telecoms have still underperformed their Dow peers in January. RIM and Apple will do their best to help reverse the graph in 2013.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons both to buy and to sell Apple, as well as what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thoughts on Apple, simply click here now.

No comments:

Post a Comment