[3:50 PM] Apple Stock Watch: Apple Shares Fall After Stellar Earnings Report. Go Figure.
by Wes George
Tech stocks slipped weakly into the three day Easter weekend on light volume, while the old economy of the Dow extended this week's gain. In a reverse of common sense, shares of Apple fell on the heels of an excellent earnings report and news of a 2 for 1 stock split scheduled for May 19th.
So far this has been one of the best earnings seasons in the last decade with profits rising on average 23% over last year at this time. Such strong earnings hail the continue expansion of the US economy well into the first decade of 2000.
According to the Wall Street Journal, "Economists say it is unusual for earnings to be growing so fast this deep in an economic expansion. Typically, profits surge when an economy is emerging from a recession, as businesses increase production without adding new capacity or workers. They usually slow down as the economy matures. But this time, "something different is going on," says Charles L. Hill, director of research at First Call/Thomson Financial in Boston. That something, he and others say, is actually a combination of strong retail sales, increased demand for goods in recovering markets overseas, and continued productivity gains."
The Mac Observer Stock Watch Virtual Portfolio had a weak day along with the general softness on the Nasdaq.
Apple sagged 2 1/4 or -1.86% to close at a disappointing 118 7/8 on huge volume of 6.432 million shares.
The Nasdaq shed 62 points (-1.69%) to closed at 3643 on volume of 1.4 billion shares traded. Biotechs, wireless and the Nasdaq big cap stocks all were weaker today. The Nasdaq gained about 10% this week in a remarkable come back after last week's market rout.
Many of the speculative high flyers in the biotech and Internet sectors are out of favor with investors and many may never again reach their former Olympian price levels.
The Dow climbed 169 points (1.58%) to close at 10844 on very light volume of 892 million shares. Today's gains were led by consumer and insurance stocks, dullsville. The Dow is up about 5% for the week.
The S&P 500 gained 7.07 points (0.50%) to close at 1434.54.
In Apple related businesses: Akamai lost 2 dollars to close at 87. ARM Holdings lost 7/16 to close at 31 1/4 (The stock split 5 for 1 this week) Adobe traded flat to close at 112 5/8. Earthlink lost 1 7/16 to close at 14 1/16. Macromedia bounced 1 15/16 to 59 9/16. Motorola restored 3 11/16 to close at 110 15/16. IBM slid 1 1/4 to 103 3/4.
Apple's competitors: Hewlett Packard climbed 3 3/4 to close at 139 9/16. Intel lost 3 11/16 to close at 115 3/8. Gateway lost 1/8 to close at 54 7/8. Compaq lost 1/16 to close at 27 1/2.
Another class-action lawsuit on the behalf of consumers bled by the Microsoft monopoly was filed in Washington today as the company prepares to announce earnings this afternoon. Microsoft is expected to report earnings of $0.41 per share and there is little chance the company will miss that number due to its huge investment portfolio. The real numbers to watch are the revenues due in at $5.9 billion. Also, watch to see if margins remain at 39%. Shares of Microsoft gained 1/4 to 78 15/16.
The bellwether 30-year US Treasury bond climbed 8/32 to 105 29/32 in a shortened trading session. The yield, which moves inversely to the price, dropped to 5.83%.
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, as well as The Mac Observer Virtual Stock Watch portfolio.
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