[4:30 PM] Apple Stock Watch: Apple Tanks, Closes Under 90
by Wes George
Ouch, that's got to hurt! The Nasdaq dipped to 3172, its lowest point since November 9th 1999, before bouncing back above 3350. Apple bounced too - off support at $86 - but still closed down more than $4.
The stock markets tanked in anticipation of a slowing economy due to the Fed's overzealous fear of inflation. Every recession of the 20th century in the US was proceeded by a tight money policy by the Federal Reserve. The Nasdaq hasn't really seen the sort of nightmare of capitulation that signals a true bear market bottom. The high flying technology "blue-chips" like Cisco and Yahoo are still overvalued by traditional yardsticks. The best buying opportunities could be yet to come.
An Associated Press article explained, "Many analysts are holding to the view that the current weakness is washing out the exuberance that dominated the market at the close of 1999 and in early 2000. But with the damage mounting, investors are struggling to determine which technology stocks - if any - are worthy of their still-high prices."
On the other hand, the darkest hour is just before dawn. The Nasdaq's ability to maintain support levels and its stunning recovery today seem to be defining the low end of a trading range rather than continuing the downtrend begun March 27th.
Apple fell 4 1/16 or 4.32% to close at 89 15/16 dollars, the stock's lowest level since January 12th, on volume of 6.7 million shares, almost twice the normal volume.
Last November Apple built a plateau of support in the high $80s. If this breaks down the next notch lower is about $76, a support range established in September of 1999. However, the unusually high volume could indicate a shift of AAPL share ownership from weak hands to the strong, a sign the bottom is near.
The Nasdaq nose dived 218 points but came back to end the session down only 26 points (-0.77%) to close at 3364 on volume of 1.6 billion shares.
The Dow fell 84 points (-0.79%) to close at 10542 on volume of 868 million shares.
The S&P 500 dropped 6.23 points (-0.44%) to close at 1400.72.
The Mac Observer Stock Watch Virtual Portfolio is getting murdered.
In Apple related businesses: Akamai lost 2 9/16 to close at 69 3/8. ARM Holdings lost 2 11/16 to close at 25 11/16. Adobe traded up 1/8 to close at 109 11/16. Earthlink rose 1/2 to close at 17 1/2 dollars. Motorola dumped 2 1/4 to close at 87 7/8 .
IBM gained 2 9/16 to 109 after it announced that it will start production with a new high performance microprocessor technology call "silicon-on-insulator" (SOI) which could boost G4 performance by 30 percent.
A ZDNet News article reported, "SOI technology holds significant promise for consumers. IBM plans to use the technology in PowerPC chips embedded in consumer devices. IBM, for example, plans to incorporate the technology into desktop PowerPC processors, like those used by Apple Computer Inc. IBM will also use SOI in new low-power processors for personal devices, such as cellular phones, and is also looking to apply SOI to its network processors for use in network infrastructure equipment."
See this week's Apple Trader article for a graph illustrating the growing MHz gap between the G4 and Pentiums that IBM's SOI technology promises to remedy.
In a separate story Compaq announced that IBM will build Compaq's Alpha line of computer chips using their SOI technology at some point in the future.
Apple's competitors: Hewlett Packard lost 3 7/16 to close at 122 3/4. Gateway dipped 1 7/8 to close at 47 3/8. Compaq fell 1/2 to close at 26 15/16. Shares of Microsoft dropped 7/8 to 64 3/16, its lowest point since December of 1998. Intel gained 1/2 to close at 118 3/8.
The bellwether 30-year US Treasury bond climbed 5/32 to 100 22/32. The yield, which moves inversely to the price, fell to 6.20%.
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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