Apple Stock Watch - More Warnings Leave Markets Mixed, Apple Loses 11 Cents

by , 9:00 PM EDT, June 18th, 2001

SmartMoney has published a piece that examines the ongoing conventional wisdom that a recovery will occur during the 2nd half of the year. That second half begins in less than two weeks, and though bullish calls are still ringing forth, the article says that corporate earnings don't seem to be backing that up. The statistics behind the trading do, however. From the article:

It's certainly true that investors have become somewhat inured to disappointing corporate and economic news of late. Last week's rout notwithstanding, the S&P 500 index has advanced nearly 9% since April 9, while the Nasdaq Composite and Dow Jones Industrial Average are up 16% and 8%, respectively, over the same period.

The pundits say they're heartened by several statistical developments. For one, the forward 12-month operating-earnings estimate for the S&P 500 was revised upward in May and again in June — the first such upward revisions in nine months. For another, more companies are offering positive earnings guidance, while fewer are issuing profit warnings. First Call reports that the rate of positive preannouncements is running 28.8% above first-quarter levels. And though a hefty 65% of the 768 second-quarter preannouncements to date have been negative, that's down from the first quarter warning rate of 68%.

Speaking of earnings warnings, Level 3 Communications issued one of their own today, and that helped set the tone for today's trading. The markets closed mixed with tech stocks taking the brunt of the losses. The Nasdaq closed below 2000 for the first time since April 17th, and today's 7th consecutive losing day marks the first time since the late 20th century since that happened.

Oracle turned in results that beat lowered expectations. The company earned 15 cents per share, a penny higher than the consensus 14 cents per share analysts had expected. The company reportedly offered steep discounts to its customers in the last days of May in an effort to meet their numbers, according to a Reuters article.

The handheld war has taken a very interesting twist as Compaq has become the largest vendor of handhelds in terms of revenue. Palm still leads in terms of numbers of units sold, but that lead too is declining. This marks the first time there has been a serious contender to Palm's leadership. Compaq, which uses Microsoft's PocketPC operating system for its iPaq handheld, has been a big hit with businesses. AP has a story on this development, and TheIndustry has commentary.

Microsoft got a great big piece of egg on its face after it was learned that the company has been using Open Source code in some of its services. The company has been using FreeBSD code, in theory due to its superiority to Windows according to an article from ZDNet, at HotMail. This despite the company's ongoing campaign against Open Source development, which the company calls un-American and a threat to intellectual property. The company's propaganda machine has apparently scored points with at least some journalists, however, as C|Net has published an article that largely defends the company's anti-Linux stance.

Lou Gerstner, IBM's soon to retire CEO, should now be called Sir Gerstner. Mr. Gerstner received an honorary knighthood from the Queen of England today. Mr. Gerstner was so honored because of IBM's contribution to eCommerce and education.

Apple got an upgrade from Wit Sound View according to Yahoo!'s In Play:

Sources at Wit SoundView say the firm would be buyers of AAPL here; says that while retail sales have been weak over past two months, Apple is showing signs of solid execution and is in the middle of several new product cycles.

It didn't help Apple close on a positive note, but it may have helped the stock keep from closing on a lower note. Wit Sound View has often been bearish on Apple during the past two years, but the firm seems to be realizing what other analysts have realized, that Apple is firing on all cylinders. AAPL opened lower this morning and proceeded to jump and gyrate all over the charts, spending most of the day in negative territory. At noon, the stock began clawing its way higher, spending most of the later afternoon session in positive territory, only to fall back in the mat 45 minutes. The day's volume was light and AAPL traded in a range of 20 - 20.85.

Apple closed at 20.33, a loss of 0.11 (-0.54%), on light volume of 6,177,100 shares trading hands.

The Nasdaq closed at 1,988.64, down 39.79 (-1.96%).

The Dow closed at 10,645.38, up 21.74 (+.20%).

The S&P 500 closed at 1,208.43, a loss of 5.93 (-0.49%).

Adobe has apparently been selling copies of Acrobat like there was no tomorrow. ADBE closed at 40.54, up 0.98 (+2.48%), on light volume of 3,775,100 shares trading hands.

Akamai closed at 6.72, a loss of 0.79 (-10.52%), on volume of 3,028,200 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 12.80, up 6 cents (+0.47%), on very light volume of 665,200 shares trading hands.

IBM closed at 114.27, a gain of 0.67 (+0.59%), on light volume of 5,185,000 shares trading hands.

Macromedia has announced a service called Sitespring designed to help Web developers improve the development process. MACR closed at 19.63, down 0.58 (-2.87%), on volume of 1,128,400 shares trading hands.

Motorola has announced a partnership with Erickson for developing 3G services and products in Australia. MOT closed at 13.07, down 1.18 (-8.28%), on volume of 11,720,400 shares trading hands.

Dell closed at 23.92, a loss of 0.40 (-1.64%), on light volume of 20,926,700 shares trading hands.

Gateway closed at 15.10, a loss of 0.80 (-5.03%), on very light volume of 1,298,400 shares trading hands.

Intel closed at 27.55, down 0.13 (-0.47%), on very light volume of 27,883,800 shares trading hands.

Microsoft has announced a deal with Paul McCartney to offer various Beatles and McCartney video at MSN Music. MSFT closed at 66.88, off by 1.14 (-1.68%), on light volume of 28,443,900 shares trading hands.

If you are interested in Apple's stock, join our forum members in the Apple Finance Boards, a moderated forum for Apple Investors and people who are interested in Apple's financial dealings. For other stories regarding Apple's stock activity, visit our updated Apple Stock Watch Special Report.