[4:00 PM] Apple Stock Watch: Tech Stocks Hit Air Pocket, Apple Declines
by Wes George
The US stocks opened dramatically lower this morning stimulated by a fierce down draft from markets overseas. The Nasdaq was down over 200 points in the first hour but trimmed that loss by the end of the session, while the Dow ended higher. Apple gave back some recent gains.
The Wall Street Journal commented, "investors used the sell-off in Asia and Europe as an excuse to sell some shares of speculative tech issues, capturing profits after a period of strong gains."
Apple lost 4 7/16 or 3.53% to close at 121 5/16 on 2.7 million shares traded.
Chris Brown of Pax World Fund appeared on CNBC this afternoon. Apple Computer was among his top stock picks because of strong sales forecasts for the iMac and iBook. He noted that Apple's stock price is "relatively cheap compared to its peers, such as Dell."
The Nasdaq sank 141 points (2.8%) to close at 4907 on 1.7 billion shares traded. The biotech stocks, lost over 8.0% today , while Internet, software and computer hardware stocks were mostly lower.
The Dow gained 18 points (0.18%), to close at 9947 on volume of 996 million. Procter & Gamble (PG) bounced 3 3/16 to close at 56 15/16 as investors tip toed back into beaten down value stocks.
The S&P 500 slipped 11.47 (0.82%) to close at 1383.60. The Russell 2000 was off 2.4%.
In Apple related businesses: Adobe was down 1 1/8 to close at 82 1/8. Akamai lost 11 1/4 to close at 284 3/4. ARM Holdings lost 17 1/2 to close at 213 1/2. Earthlink gave back 1 3/16 to close at 22 9/16. Macromedia lost 2 3/8 to 92 1/4. Motorola lost 9 1/8 to close at 165 3/4. IBM trumped the market downdraft by announcing a new line of computers aimed at the Internet appliance market. IBM gained 2 7/16 to close at 107 11/16.
Apple's competitors: Gateway shed 3 dollars to 59 1/2. Compaq lost a fraction to close at 28 7/16. Hewlett Packard lost 7/16 to close at 146 1/2. Microsoft said it was forming a $1 billion venture with Andersen Consulting to help deploy Internet services based on Windows 2000. Shares of Microsoft sank 3 dollars to close at 98.
Robertson Stephen's electronics analyst, Daniel Niles upgraded Dell and Intel to 'strong buy' from 'buy' with a target price of $65 for Dell and $150 for Intel. Dell rose 3 1/2 to 54 3/4.
Mr. Niles said about Intel; "after upgrading Intel to a buy on January 10 at 82 dollars, we believe the company's first quarter is looking even stronger than we anticipated...We believe that PC demand has been so strong that Intel will not be able to satisfy demand until the second quarter, versus the original expectation of the first quarter.''
Mr. Niles believes a multiple of 50 to 60 times calendar year 2000 earnings is possible for Intel, versus the current multiple in the high 30s. Intel climbed to a new high up 1 15/16 to close at 122 1/8.
Economic data in the news: A busy week of number crunching should keep the bond and stock markets nervously considering the effect of this latest data on Federal Reserve policy. Tomorrow morning the retail sales numbers for February are released by the Commerce Department, followed by inventory data and factory capacity for January on Wednesday. On Thursday, the producer price index (PPI) may have some effect on the markets. Friday the consumer price index (CPI) is released. Wall Street will be watching closely for any acceleration in the PPI and the core CPI which might signal inflation.
Next week, on March 21st, the FOMC (Federal Open-Market Committee) meets. Most observers believe that they'll decide to tighten credit by raising the Fed Fund rate a quarter point from 5.75% to 6.00% in a further effort to slow economic growth.
The bellwether 30-year US Treasury bond traded down 10/32 to 101 dollars. Initially, the long bond soared in a flight to quality as the Nasdaq tanked, but then gave those gains back. The yield, which moves inversely to the price, rose to 6.18% from 6.16% last week.
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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