[5:00 PM] Apple Stock Watch: AAPL Drops 4.7% Again
by Wes George
The stock markets wilted today ahead of a week full of economic data releases that could effect the Federal Reserve's interest rate decision later this month. Meanwhile, a hand full of earnings warnings and downgrades anticipate a decelerating economy. Apple's stock traded down almost 5% on this slow summer Monday.
The big story of the day wasn't tech related. Gas prices are heading higher as the summer vacation begins. Some oil and gas analysts believe crude oil prices could go to $40 per barrel before the year is out. Crude oil prices rose above $31 per barrel today. The problem, they say, is inventories are low and OPEC isn't producing fast enough to replenish stocks in time for the summer demand. OPEC meets on June 21st to possibly raise production targets.
Expect the economic news released this week to effect the stock markets. Tomorrow, weakening retail sales for May are expected to be announced. On Wednesday that all important measure of inflation, the consumer price index for May, is released. Forecasts call for it to trend lower from April.
Thursday look for the industrial production and capacity utilization data, which should indicate some slowing from April. On Friday new housing starts are forecast to indicate a slowdown in the building sector.
A slowing economy is exactly what Wall Street hopes will induce the Federal Reserve to delay raising interest rates for a seventh time in a year.
The question is: Can the summer rally continue while absorbing evidence that the economy is slowing, since the result of that slowing is lower earnings forecasts for many sectors? On the other hand, if the economic data points to little or no economic slowdown, can the stockmarkets absorb yet another interest rate hike without retreating to May's market lows?
Apple drifted lower all day, down 4 9/16 or -4.77%, to close at 91 3/16 on volume of 2.5 million shares.
RealNetworks Inc. (RNWK) announced plans to license Apple's QuickTime Internet media format and support the QuickTime format on its RealServer software.
The Nasdaq fell 106 points (2.76%) to closed at 3767 on light volume of 1.2 billion shares. Earning warnings from Citrix Systems (CTXS) raised questions about the tech stocks' immunity to an economic slow down. Citrix, a thin-client software design firm said its earnings will fall well short of forecasts.
The Dow fell 49 points (-0.47%) to close at 10564 on very light volume of 755 million shares. Today was the 2nd lightest volume of the year and coincidentally, the Dow traded exact one point higher than a year ago today.
Wal-Mart and Home Depot held the Dow back on fears that slowing consumer spending and home sales will lower revenues for the retail giants. Energy and utility stocks were strong.
The S&P 500 dropped 10.95 points (-0.75%) to close at 1446.00.
The Mac Observer Stock Watch Virtual Portfolio was down with the general tech stock weakness.
In Apple related businesses: Akamai fell 9 1/4 to 88 3/4. ARM Holdings lost 1 1/2 to close at 31 1/4. Adobe traded up 9/16 to close at 121 1/4. Earthlink fell 13/16 to close at 16 1/2. Motorola lost 5/16 to close at 34 11/16. IBM shed 1/2 to 199 3/16.
Apple's competitors: Hewlett Packard lost 2 1/4 to close at 125 1/4. Gateway was down 2 dollars to close at 54 5/16. Compaq fell 5/8 to close at 25 7/8. Shares of Microsoft dipped 1 15/16 at 66 7/8. Intel fell 2 to close at 125 1/16.
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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