US Stock Market Recap: Will Google Challenge Microsoft In The Operating System Arena

The first day of the second quarter greeted investors well as all major indices were up. Dow Jones gained over 2.00% to close the day at 7,761 while the S&P 500 and NASDAQ ended up 1.51% and 1.66% respectively to close at 881 and 1,551. The 10 year saw its yields shrink to 2.66% while Gold and Oil settled at $929.70 and $48.43.The markets surged as better than expected manufacturing, housing, and auto sales data hit the Street. The banks fared well with Citigroup (C) up over a percent, Bank of America (BAC) up almost 2% and JP Morgan Chase (JPM) and Wells Fargo (WFC) up 0.64% and 2.49% respectively. It appears as though investors believe that the banks are returning, slowly, but surely to their previous levels of financial strength. It will be interesting to see how earnings are and the amounts these banks are writing down.

Google (GOOG) is appearing to enter the operating system environment, as the likes of HP (HPQ) are reportedly testing a netbook version of Android. This could push Google to the forefront, as its OS could end up being a perfect terminal application to recieve service from a powerful data center or the “cloud.” Microsoft (MSFT) is seriously in hot water if this takes off, the Chrome browser is already growing at a faster than expected pace. An open source platform coming from a strong brand like Google can seriously evolve the competitive environment for operating systems. It is evident that this recession has helped Google work on projects that could help it surpass its closest competitors.

Carl Icahn has struck again, this time waging a proxy battle with Biogen (BIIB) another biotech firm. Icahn believes that Biogen who has an aging pipeline facing expiration, should be sold off to a larger pharma company. This spur more potential in the healthcare M&A arena, as further consolidation looms. Many large pharma houses often times lack the biotech experts who can develop many life changing drugs. It will be interesting to see how Icahn fixes the problem over at Biogen.

Disclosure: The Fund the author is associated with is long JPM and GOOG.

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