This Story Posted:
July 29th, 1999

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[3:30 PM]
Apple Stock Watch: Amidst Major Market Decline, Apple Holds Steady
The stock market took a fairly steep turn today with declines out numbering advances 3:1 on the Dow. The declines come on reports that a key labor indicator has pointed in a direction that could cause the Fed to raise interest rates after all. According to a report from TheStreet.com:

The second-quarter ECI showed a gain of 1.1%, well above the 0.8% increase economists had forecast. The strength in the index has completely overshadowed much weaker second-quarter gross domestic product figures than the market expected. The advance estimate of GDP showed a gain of 2.3%, against expectations of a 3.3% increase.

The ECI is weighing heavily on stocks because the Fed has suggested there are two things that could trigger a tightening -- an uptick in inflation or a too-tight labor market. The market worries that for the Fed, the ECI will indicate the latter.

"The market is certainly looking at the ECI being more important than GDP," said Dan Mathisson, head stock trader at D.E. Shaw Securities. "Globex is getting hit pretty hard."

In addition to this, there are reports coming from the justice department that they will seek the breakup of Microsoft after failing to settle the antitrust case out of court. Not surprisingly, much of the Tech Sector fell, including all of Apple's major PC competitors. IBM, Dell, Gateway 2000, Compaq, and Hewlett-Packard all closed down.

Apple fared much better though and closed down 1/2 point. Apple closed at 53 7/8, a loss of 1/2 or 0.92%. Volume was light with 2,452,800 shares trading hands. News of the investment in Samsung as well as the deal inked with AOL may have had some positive affect on the stock.

The Dow closed at 10791.29, down 180.78, while the Nasdaq closed at 2640.01, a loss of 65.83.

The Mac Observer Spin: Apple actually traded in positive territory in brief spurts throughout the day unlike any of the PC companies which all traded in negative territory throughout the day. It could well have been incidental, but the market seems to have shown a marked degree of confidence in Apple considering the sour mood that permeated the floor. Tomorrow should be an interesting day.

Apple



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