[4:00 PM] Apple Stock Watch: Big Dow Sell Off Drags Apple Down
by Wes George
Strange days on Wall Street. The Dow crashed on news that Procter & Gamble can't meet earnings estimates. A thick broth of fear (oil prices, rising interest rates, too rapid growth, tight labor and the wealth effect) spooked the value stocks and the blue chips even lower, while the highest of the high tech, often with scant revenues or earnings, climbed even higher. Apple gave back more of its recent gains.
Apple lost 2 13/16 or 2.24% to close at 122 7/8 with 2.4 million shares trading hands.
The Nasdaq, after scoring a new intraday high--its first above 5,000--lost 57 points (-1.16%) to close at 4847 with volume at 2.1 billion shares traded . The Nasdaq is up about 20% for the year, helped by the Philadelphia Semiconductor Index (SOX), which another hit a new high today. Fiber optic and some types of Internet stocks also did well.
The Dow, sliding more than 415 points intraday, ended down 374 points (3.68%), at 9796 on volume of 1.3 billion shares. Crude oil prices climbed above $34 per barrel to a 9 year high. The Dow is now off 17% from its January high of 11,722. Consumer product stocks, such as Johnson & Johnson (JNJ), took big hits, while transportation stocks got hammered. Oil exploration stocks climbed higher.
The S&P 500 slipped 35.66 (2.56%) to close at 1355.62.
In Apple related businesses: Adobe slid 4 5/8 to close at 81 3/16. Akamai gained 7 1/16 to close at 261 1/16. ARM Holdings lost 12 3/16 dollars to close at 222 dollars. IBM lost 3/16 to close at 102 7/8 dollars. Earthlink gave back 1/2 to close at 23 1/2. Macromedia gained a buck to 88 dollars. Motorola lost 3 5/8 to close at 177.
Apple's competitors: Compaq lost 1 5/16 to close at 26 5/8. Intel gave back 1 5/8 to close at 115 3/4. Dell lost a dollar to 45 3/4. Hewlett Packard lost 3 1/2 to close at 143. Gateway lost 2 1/4 to 63 1/4.
Shares of Microsoft gained 2 1/4 to close at 92 7/8, after Goldman Sachs analyst Rick Sherlund said that settlement talks in the company's antitrust suit "may be heating up" and any settlement would likely increase Microsoft's net worth.
Economic news: The Labor Department reported that US productivity for the last quarter of 1999 surged ahead at 6.4%, the highest pace since the end of 1992. Productivity is defined as the amount of output, in goods or services, produced for each hour of work. Productivity grew at 3% rate for the whole year of 1999.
Increasing productivity is a powerful cure for inflation. Increases in worker output allow corporations to raise wages to hold on to employees in the tight labor market without raising the price of finished goods or services. Nevertheless, the wonderful productivity data may bode ill from the Federal Reserve's special point of view.
According to the Wall Street Journal, "the Federal Reserve recently has suggested that productivity gains may contribute to inflationary pressures by fanning expectations of ever-higher corporate earnings. Fed Chairman Alan Greenspan has said those expectations boost stock prices and spur a consumer spending spree that already is stretching the economy to its limits. He has repeatedly signaled that the Fed will keep raising interest rates until the acceleration of stock and real-estate prices slow."
The bellwether 30-year US Treasury bond traded down 1/32 to 101 1332. The yield, which moves inversely to the price, rose to 6.15%. The US Treasury Department announced a $1 billion repurchase of outstanding government securities with the aim of reducing the national debt.
For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have many of these same quotes reported live (20 minute delay) on our home page. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.
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