[4:00 PM] Apple Stock Watch: Stock Market Soars, AAPL Climbs Higher
by Wes George
Ok, kiddies, ready, steady, go! It's off to the races on Wall Street once again after the Fed lowered the checkered flag by leaving short-term interest rates unchanged. Of course, they left the door open for a rate hike in August and waved a finger at inflation which supposedly lurks just off stage. Apple benefited with the rest of the market by climbing over 5.0%.
The FOMC encouraged the rally by saying, "Recent data suggest that the expansion of aggregate demand may be moderating toward a pace closer to the rate of growth of the economy's potential to produce," But, it added, "signs that growth in demand is moving to a sustainable pace are still tentative and preliminary, and the utilization of the pool of available workers remains at an unusually high level."
The Wall Street Journal commented, "The economy, which soared at a 5.4% growth rate in the first three months of this year, is widely expected to have slowed to a 4% rate or less in the current quarter. But economists have said that the Fed doesn't want a repeat of the last two years, when growth slowed in the spring only to reaccelerate sharply for the rest of the year."
Speaking of reacceleration, durable goods demand, pushed by a consumer rush for electronic and automobiles, soared an unexpected 6% in May for the biggest monthly increase in five months. If volatile transportation related goods were excluded, durable goods, a measure of consumer demand for items that last at least three years, soared 6.6% for its biggest monthly advance in 15 years.
Later this week small stocks will be rotated in or out of the Russell 2000 as the index is routinely re-balanced. Meanwhile, mutual funds will also be shifting capital around in what's called on Wall Street "end of quarter window dressing". Volatility is the hallmark of both these phenomena.
Apple climbed 2 11/16 to close at 54 7/16 on high volume of 5.1 million shares trading hands. Technically speaking AAPL appears to be building a support zone in the $52 range from which it could rally into the $60s next week.
The Nasdaq climbed 81 points (2.11%) to closed at 3940 on volume of 1.6 billion shares. As widely predicted the markets climbed all day into the Fed's interest rate announcement and then gave most of the day's gains back after the news came out.
The Dow rose 23 points (0.22%) to close at 10527 on volume of 1 billion shares. The Dow tech stocks had a great day.
The S&P 500 rose 4.27 points (0.29%) to close at 1454.82.
In Apple related businesses: Adobe traded up 6 3/4 to close at 124 13/16. Earthlink fell 3/16 to 14 13/16. Motorola lost 9/16 to 30 1/8.
IBM bounced 3 15/16 to 113 11/16 after yesterday's big hit from a broker downgrade of estimates for this quarter's revenue growth to a mere 1%. IBM announced today that it would spend $1 billion a year and add 1,000 employees to develop and bring to market software to leverage businesses online.
Apple's competitors: Hewlett Packard gained 6 3/16 to close at 122 13/16. Gateway was up 3/16 to 58 1/2. Compaq climbed 3/8 to 28 3/16. Shares of Microsoft traded flat at 78 15/16 . Intel climbed a dollar to 132 3/8.
The Mac Observer Stock Watch Virtual Portfolio ended higher.
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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