Apple Stock Watch - Dell iPod News Helps Push Apple To 9-Week High

by , 5:45 PM EST, October 30th, 2002

News that Dell will be selling Apple's iPod, and official confirmation from Apple that Target will be doing the same thing, helped propel AAPL to a new 8-week high. According to News.com, Apple will be selling Windows iPods through its online Web site soon, and is already selling the MP3 players through its phone ordering center, something TMO confirmed (see also our full coverage for more information). Apple also confirmed that Target will be selling iPods in all 1,148 of its retail outlets, offering Apple a huge boost in exposure to mainstream consumers (see also our full coverage for more information).

The dual news helped kick Apple's stock to a new 9-week high, with AAPL closing at 15.98, up .54 (+3.50%) in moderate volume. Intra-day trading saw Apple soar to 16.37, a US$.93 gain, only to have profit taking reclaim 39 cents of those gains in the last 45 minutes of trading. Dell's stock closed higher at 29.06, a gain of 0.40 (+1.40%).

The Dow Jones Industrial Average ended at 8,427.41, up 58.47 (+0.70%). The S&P 500 Index finished at 882.15, down 8.08 (-0.91%). The NASDAQ Composite Index fell to 1,326.73, up 26.19 (+2.01%). On Monday Apple dropped to 890.71, higher by 8.56 (+0.97%).

While investors reacted positively, analysts are a bit less sanguine. There are concerns about Christmas buying in the PC market will be light. From CBS Marketwatch coverage of Apple's iPod news:

Apple's move to increase the outlets carrying its iPods doesn't surprise many industry analysts, many of whom are saying this could be a down holiday season for personal computers. Analysts say PC makers are taking different steps to expand the reach of their other digital products in order to boost end-of-the-year revenue.

"What I'm telling investors is pick up a Sunday newspaper circular and look at a Best Buy ad," said Walter Winnitzki of First Albany Securities. "The PC is not getting positioned as the hot product as in the past. Big-screen TVs are getting pushed on the front pages."

Apple's move in the retail space with the iPod indicate a shift in Apple's strategy, with the PC maker considering the P3 player a direct revenue creator, instead of merely being a vehicle to increase Mac sales. Last week, Needham analyst Charles Wolf said that he expected Apple to sell some 500,000 iPods this quarter alone, up from 140,000 in the September quarter. This was before the Dell deal was announced, which could easily contribute significant unit sales as well. This makes the iPod a major money-maker for Apple.

The Markets

Apple and Dell helped lead the tech stocks in a broad rally that cut through yesterday's losses across the board. French networking giant Alcatel helped lead networking stocks higher, as well. With tech on board, and a rate cut from the Fed imminent (see yesterday's Apple Stock Watch for more information), the rest of the markets followed suit. As shown above, all three major indexes ended the day higher, and all of the stocks we follow in the Apple Stock Watch did the same.

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.