May 8th, 2000

[4:00 PM] Apple Stock Watch: Another Down Day, AAPL Falls US$3 by Wes George Light trading volume and a negative drift for tech stocks set the tone for the coming week 'o worry ahead of the Fed's interest rate policy meeting on May 16th. Don't expect much excitement this week while many investors nervously take to the sidelines. Apple lost more ground today. A Baron's article illuminated the obvious--shares of Cisco (CSCO) at a P/E of 183, or 120 times forward earnings, are overvalued. Once the sheep on the Street heard the emperor has no clothe their enlightenment burdened all tech stocks with a mantle of doubt about valuations. Take a good look at this market because it's the first true bear trend we've had since the Asian crisis of 1998. Notice as the volume declines so does the volatility. The Mac Observer Stock Watch Virtual Portfolio sagged along with the down day for tech stocks. Apple slipped 3 dollars or -2.65% to close at 110 1/8 on weak volume of 1.6 million shares. AAPL's chart is uncomfortably close to confirming a technical chartist formation called a head and shoulders top which indicates that institutions are distributing their AAPL shares. If AAPL breaks through support at $109 the stock, in the absence of some good news, is likely to trend back into the double digits to build a base in the mid $90s. Note that technical analysis merely indicates probabilities and says little about the long term prospects of investing in Apple. The Nasdaq lost 147 points (-3.86%) to closed at 3669 on volume of 1.13 billion shares traded for the lowest volume of the year. The Dow climbed 25 points (0.24%) to close at 10603 on very light volume of 783 million shares, the lowest volume of the year. Financial stocks took the leadership role on the Dow, but the broader market was down. Declining issues led advancing. The S&P 500 lost 8.46 points (-0.59%) to close at 1424.17. In Apple related businesses: Akamai lost 10 7/16 dollars to close at 86 5/8. ARM Holdings lost 2 5/8 to close at 31 3/8. Adobe lost 10 5/16 to close at 109 3/8. Earthlink lost 7/16 to close at 17 dollars. Motorola lost 2 5/8 to close at 106 7/8. IBM gained 2 1/16 to 109 3/4 after unveiling a new line of desktop PCs which follow the path pioneered by the iMac. The new all-in-one PC has no floppy, no legacy ports and a liquid crystal display. Apple's competitors: Hewlett Packard fell 1 1/16 to close at 135 11/16. Intel dropped 5 3/4 to close at 117 5/8. Gateway lost 3 3/8 to close at 50 1/16. Compaq lost 3/16 to close at 26 13/16. Shares of Microsoft slipped 1 5/16 to 69 13/16. The bellwether 30-year US Treasury bond lost 24/32 to 100 1 /32. The yield, which moves inversely to the price, rose to 6.25%. 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. Apple