Apple Stock Watch - Apple Moves Up In Big Market Rally

by , 9:00 AM EDT, August 20th, 2002

Apple Moves Up In Sympathy With Dell

Apple moved higher at last week's end in sympathy with Dell Computer. Dell reported solid gains in revenues, earnings and market share relative to the soft PC market. Dell met Wall Street expectations and continues to do well despite a challenging sales environment.

It wasn't long ago that Dell captured the worldwide PC sales crown from rival Compaq, only to lose the sales leader title to the combined HP-Compaq following the merger. Dell's recent market share increase appear to put the company within reach of regaining the sales leadership position, as its market share gains are coming at the expense of HP.

On Monday, HP announced it will be releasing products in the business market with AMD Athlon chips. The AMD chips are less expensive than their Intel counterparts. The new product line will carry the Compaq brand name and will be the first large-scale use of AMD's chips by HP for products aimed at small and medium-sized businesses. Previously both HP and Compaq used AMD chips in their consumer-level PCs. The move to AMD chips may help HP reduce prices and maintain market share in the small and medium-sized business market.

Gateway, the beleaguered PC mini-major, is struggling to win the confidence of Wall Street. Overall the PC market continues to see declines in sales, and Gateway's products have not caught fire with the buying public. To the company's credit Gateway is becoming more competitive on price, but it's a hard battle to win share when competing with Dell, and fighting for every inch of sales turf in the corporate market.

Monday Market Activity

The market moved higher on Monday almost from the opening bell. The major market indexes gained ground steadily throughout the day pushing prices to five-week highs. Investors seized on good news from giant retailers Lowe's and Toys R US as indicators that consumers continue to spend despite a big July drop in positive consumer sentiment. Toys R US reported a smaller than expected loss and traders rewarded the stock with a more than 8 percent increase in share price.

The markets moved steadily higher despite a reported 0.4 percent drop in the index of leading economic indicators. The drop in the index, which is often viewed as an important harbinger of economic events to come, was in line with Wall Street expectations. The Dow Jones Industrial Average gained 212.73 to close at 8,990.79. The S&P 500 Index moved up 17.21.93 to end at 950.70. The NASDAQ Composite Index finished up 33.53 at 1,394.54. Apple added $.17 to close at $15.98.

Apple

Last week Apple executives officially certified their financials with the Securities and Exchange Commission more than four months ahead of the company's deadline to sign off on their recent financial statements. AOL Time Warner jumped more than 6 percent on Monday following the formal acceptance of AOL's financial certification filing. Until today, the SEC held off on clearing the certification that executives for the Internet and entertainment behemoth filed last week.

The New York Times is reporting that Apple is working on a secret "iPhone" project. The Times suggests Apple's gamble with a multi-function cellular device may be the biggest roll-of-the-dice yet for Apple's legendary CEO, Steve Jobs.

In other news, Apple is reportedly making available a Family 5-Pack license of Mac OS X, 10.2. The move is seen as a sharp contrast to what many view as a very aggressive OS authentication scheme used by Microsoft to thwart software piracy. The Family 5-Pack offer is designed to be a means for families and households that own more than one Mac to legally upgrade their computers without buying individual upgrades for each computer. The Family 5-Pack retails for $199 versus a single-user copy for $129. The purchase of the family pack is voluntary and is designed for families that wish to comply with legal license requirements.

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.