[4:00 PM] Apple Stock Watch: Apple Bounces Off Yesterday's Lows In Market Rally
by Wes George
The unemployment rate fell to a level not seen since January of 1970 and wages are rising. Not surprisingly, this piece of good news for Main Street was expected to play poorly on Wall Street where tightening labor markets represent the first stage of inflation. Nevertheless, stocks staged a low volume rally perhaps because investors have already factored in rising interest rates. Apple bounced off its recent low.
One question still hangs over the markets: How much will the Fed raise interest rates on May 16th. Currently many indicators forewarn a possible 50 basis point increase (.5%), a departure from the FOMC's usual quarter point pace. The Fed has raised rates by a quarter point five times since last June and has not implemented a half point hike since June of 1995.
Many Wall Street pundits believe that a half point hike would help speed the stock markets towards the conclusion of the Fed's current higher rates policy along with confirming to investors that the Fed is dead serious about slowing the US economy. To slow the robust US economic growth could take another full point of gradual rate hikes spaced through out the year.
The Mac Observer Stock Watch Virtual Portfolio gained little as the mild rally in tech stocks didn't raise Akamai's or IBM's prices by much and Lucent was down by 1 5/8 to close at 58 5/8.
Apple regained 2 7/16 or 2.20% to close at 113 1/8 on volume of 2.5 million shares.
The Nasdaq gained 96 points (2.59%) to close at 3816 on lightest volume of the year at 1.18 billion shares traded. Nasdaq ended off 1.2% for the week
The average daily volume of shares traded on the Nasdaq are falling sharply since a March high average of 1.80 billion shares traded to this May's average of 1.30 billion (five days only). Meanwhile the cash flows to mutual funds are declining, down $700 million this week.
The Dow climbed 165 points (1.59%) to close at 10577 on the lightest volume of the year at 800 million shares trading hands. The Dow fell 1.5% for the week.
The S&P 500 gained 23.06 points (1.64%) to close at 1432.63, off 1.4% for the week.
In Apple related businesses: Akamai gained 1/16 to close at 97 1/16. ARM Holdings gained 1 1/4 to close at 34. Adobe traded higher by 5 3/4 to close at 119 11/16. Earthlink gained 5/16 to close at 17 7/16. Motorola fell 1 5/8 to close at 109 1/8. IBM gained 1/4 to 107 7/8.
Apple's competitors: Hewlett Packard surged 4 3/16 to close at 136 5/16. Intel gained 3 13/16 to close at 123 3/8. Gateway rose 1 3/16 to 53 7/16. Compaq gained 1/16 to close at 27 1/4 as the company announced organizational changes in enterprise business group.. Shares of Microsoft gained 11/16 to 71 1/8.
The US unemployment rate fell to 3.9%, and the average hourly wage rose $0.06 or 0.4% to $13.64, twice the gain expected by economists. Hourly wages are 3.8% higher than last year at this time
Earlier in the week the Commerce Department said that productivity increased 2.4% in the first quarter, slowing dramatically from the 6.9% pace in the last quarter of 1999. Economists had forecast a 3.5% rate. Productivity is the most important inflation fighting factor in the economy. The greater the productivity increases, the higher wages can rise without stimulating inflation.
US factory orders jumped 2.2% in March shored up by 10.2% surge in electronic equipment demand including household appliances and communications equipment. Economists had expected orders to grow by only 1.6% after remaining flat in February. Yet another indication that the economy shows little sign of slowing.
The bellwether 30-year US Treasury bond fell 14/32 to 100 28 /32. The yield, which moves inversely to the price, rose to 6.19%.
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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