|Apple's stock rocketed past the US$50 barrier level today to close at 54 1/2, a gain of 4 5/8 or 9.27%. Trading volume also sky rocketed with 14,456,000 shares trading hands. Today's move was triggered in part by another analyst raising Apple's rating from a Long Term Attractive to a Buy as well as setting a 12-month target of US$75. Excitement about the P1, Apple's software offerings, and next weeks expected Q3 results have all contributed to today's trading. According to a News.com report:
The company is now looking to post its seventh straight quarterly profit since the return of cofounder and interim chief executive Steve Jobs. Apple is expected to earn 64 cents a share for its fiscal third quarter, according to consensus analyst estimates from First Call. Expectations have been on the rise since April, when analysts polled by First Call predicted an average of 61 cents a share for the quarter.
While expectations of profits for the next earnings report--which will be released Wednesday--are contributing to the rise, other factors are pushing the stock as well.
"The general theme is that the product line is very strong," wrote BancBoston Robertson Stephens analyst Alex Mou. "It will be probably the strongest lineup ever going into next fiscal year. Also, there are two major operating system upgrades coming up." Mou raised his rating on Apple stock to "buy" from "long-term attractive."
This marks the first time in more than 6 years that Apple has closed over 50, an important support level now that it has been crossed. Some Observers had questioned our news yesterday that Apple had reached a 6 year high yesterday since it has crossed 50 a couple of times since May. Yesterday's high was the highest closing price, the most important figure according to Wall Street's rules. According to Wes George, The Apple Trader:
According to the classic Dow Theory, until Apple stock's price actually closely for the day above $50 it hasn't really broken the glass ceiling of resistance. This is very important, intra-day highs above $50 are interesting news but don't qualify as breaking the back of resistance until it's maintained overnight. This is rendered moot by today's trading of course.
With today's close over 50, traditional thinking holds that the 50 mark will now become the level that the forces of Wall Street seek to keep the stock above as opposed to below. Great news for Apple.
Apple's PC brethren also fared well today as IBM, Compaq, Gateway 2000, Dell, and Hewlett-Packard all closed higher today with HP actually hitting a new record high.
The Dow however closed down today at 11126.89, a loss of 60.47. The tech-heavy Nasdaq closed at 2771.86, a gain of 28.82.
For more on Apple's financial and stock news, check out our Apple Stock Watch Special Report.