[4:30 PM] Apple Stock Watch: Apple Takes A Bath
by Wes George
Healthy earnings reports continued to ease fear among Internet sector investors and pushed the Nasdaq to rally higher today as the Dow stalled out. The day was reminiscent of the tech stock froth conditions of last November through March. Apple's stock didn't join the rally, in part, because of news that AOL is reinforcing its relationship with RealNetworks.
C-Net News reported that, "America Online today said it has beefed up its internal network of computers with RealNetworks' audio and video streaming software, a move that tightens the bonds between the two companies."
Apple gave back 2 3/8 to close at 56 1/2 on volume of 7.9 million shares. In AAPL's six point trading range today the stock closed in the lower half, with most of the damage done in one 15 minute $4 sell off at about 2:45 in the afternoon -- a rather unusually event in light of the general rally conditions prevailing at the time.
The sell-off in AAPL happened just as the stock hit a powerful resistance zone at $60. This in combination with the fact that Apple has been on a roll since a low of $49 5/8 intraday on July 7th led to the nasty sell-off. But in the larger scale of thing today's weakness is only volatility due to short term traders trading on the false rumors of a merger and an analyst's clever recommendation to sell AAPL before MACWORLD for a short term profit.
The Nasdaq extended yesterday's rally by 75 points (1.84%) to closed at 4174 on heavy volume of 1.8 billion shares. Tech is back! The rotation rallies have begun. While the biotechs stock sold-off, money flooded the Internet stocks especially the infrastructure stocks such as Akamai (AKAM), and the B2B stocks such as Ariba (ARBA). Ariba announced a smaller-than-expected operating loss today and shot up 27 11/16 to 131 3/16. Semiconductors also rallied.
The Dow climbed a weak 5 points (0.05%) to close at 10788.71 on volume of 1 billion shares. The number of advancing stocks to declining stocks has reversed its bearish trendline that began early in the spring. Technical analysts see this as extremely positive for further strength this summer.
The S&P 500 climbed 2.92 points (0.20%) to close at 1495.84.
In Apple related businesses: Akamai soared 13 9/16 to 127 1/16. Adobe traded down 2 5/8 to 137 7/8. Earthlink fell 3/8 to 14 1/16. Motorola climbed 2 7/8 to 39 1/8. IBM lost 1 1/2 to 103 1/8.
Apple's competitors: Hewlett Packard gained 6 1/2 to close at 134 7/8. Compaq gained 1/4 to close at 27 dollar. Shares of Microsoft were down by 3/8 at 79 15/16. Intel climbed 2 dollars to 143 3/16.
Gateway was up 1/16 to close at 71 dollars. Gateway beat earnings estimates by a penny today. EPS came in at $0.37 on 2.14 billion in revenues. Non PC sales income was up to 40% of all income, half of that recurring. Gateway added 250,000 new net subscribers to their service offered through AOL. Gateway also said that they will bring to market a "kitchen counter top" Internet device before Christmas in cooperation with AOL.
The Mac Observer Stock Watch Virtual Portfolio Weakness in Apple and IBM today offset Akamai's stellar gains in our portfolio.
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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