Apple Stock Watch - Techs Continue Rally But Apple Falls Back

by , 8:15 PM EDT, June 26th, 2001

The markets kind of sat by the sidelines and did a lot of nothing in advance of whatever announcement may come out of this week's Fed meeting. Analysts are expecting the Fed to cut interest rates again, but there is no clear consensus on whether or not it will be a 50 basis point cut (a half point), or a 25 basis point cut (a quarter point). Anything less than a 50 basis point cut is likely to be seen as disappointing to traders.

As investors waited today, Blue Chip stocks traded lower and tech stocks rallied higher. Most of the stocks we track in the Stock Watch ended the day in positive territory, though Apple gave back 24 cents of yesterday's gains. Volume was light across the board with the Nasdaq trading 1.6 billion shares and the Dow trading 1.1 billion. In addition to the impending rate cut, corporate profits weigh heavily in many minds on Wall Street. From a Reuters report:

"We reached a point when the market was fully priced. And when the stock market is fully priced, everything has to go right," said Johnson, of First Albany. "(Instead), lots and lots of companies are telling us business, sales and earnings are still dismal, and they see no improvement."

Microsoft has unveiled their new spiffy marketing campaign for Windows XP. The company is touting a billion dollar ad campaign for their NeXT generation operating system, but TheStandard is reporting that this figure included the US$300 million that Intel is actually spending to promote the Pentium 4. That may well be, but Microsoft is still spending another US$700 million or so to market the new OS, and that is likely to lead to good sales of the product.

Earthlink has announced a US$2 monthly rate hike for its unlimited access accounts. The price hike brings Earthlink's subscription to US$21.95 per month, in line with MSN and some other ISPs. Analysts are hailing the move as one that will greatly benefit Earthlink, the company that supplies Apple access for Apple's new computers. The company traded up 12% on very strong volume.

Apple has hired Jordan Hubbard, a leading BSD and Open Source developer. Mr. Hubbard was one of the cofounders of FreeBSD, the *nix kernel upon which Apple's own Mac OS X is built. Mr. Hubbard will be overseeing point releases of Darwin, the name of the Open Source kernel that Apple uses for Mac OS X, and he will also help foster relations with the FreeBSD community. From a C|Net report:

"The FreeBSD product line has reached the stage where I feel comfortable taking a job that allows me to focus more on Darwin," Hubbard said in the posting. "Ever since Apple released the initial public beta, I've been following OS X's progress with great interest and an increasing desire to get involved with it somehow."

Hubbard said he hopes to foster such ties. "Darwin is substantially based on FreeBSD 3.2, and Apple certainly doesn't want the technology transfer to end there or to be strictly one-way. Part of my mandate will in fact be helping Apple to be an even better open-source citizen, increasing collaboration and strengthening relationships with FreeBSD and other open-source projects," he said.

This is being hailed as a victory for Apple.

Apple opened up some 75 cents lower this morning and traded in light volume throughout the day. The stock moved a narrow trading range until a late afternoon rally helped AAPL gain back all but 25 cents of that loss and closed 2 cents off the day's high. The trading range for today was 23.01 - 23.77.

Apple closed at 23.75, down 0.24 (-1.00%), on light volume of 4,871,000 shares trading hands.

The Nasdaq closed at2064.62, up 13.75 (+0.67%), on volume of 1,658,698,000 trading hands.

The Dow closed at 10472.48, a loss of 31.74 (-0.30%), on volume of 1,199,234,000 trading hands.

The S&P 500 closed at 1216.76, down 1.84 (-0.15%).

Adobe has settled piracy lawsuits with several resellers. ADBE closed at 44.65, up 0.13 (+0.29%), on light volume of 2,822,200 shares trading hands.

Akamai closed at 11.09, down 8 cents 0.08 (-0.72%), on very light volume of 487,200 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 13.83, a gain of 1.56 (+12.71%), on very strong volume of 5,743,800 shares trading hands.

IBM closed at 113.04, up 0.39 (+0.35%), on light volume of 7,081,900 shares trading hands.

Macromedia closed at 19.59, a gain of 6 cents (+0.31%), on light volume of 731,800 shares trading hands.

Motorola has landed another contract in Communist China to provide telecom infrastructure to China Mobile. The company could also benefit from the law passed in New York banning hand held phones in the car. MOT closed at 14.65, up a dime 0.10 (+0.69%), on strong volume of 14,675,600 shares trading hands.

Dell closed at 25, up 6 bits (+3.09%), on light volume of 27,628,200 shares trading hands.

Gateway closed at 14.89, down 3 cents (+0.20%), on light volume of 1,587,900 shares trading hands.

Intel is planning a new US$2 billion plant. INTC closed at 28.97, up 0.39 (+1.36%), on light volume of 34,781,600 shares trading hands.

Microsoft has shipped a service pack for Microsoft Exchange 2000. MSFT closed at 70.14, up 1.29 (+1.87%), on light volume of 31,537,500 shares trading hands.

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