[4:15 PM] Apple Stock Watch: Apple Crosses the Century Mark, But Couldn't Hold It
by Wes George
Apple shares soared as high as 103 3/4 today as two upgrades awoke Wall Street to both Apple strong growth potential going forward and their currently undervalued position in comparison to the other PC vendors.
Kevin McCarthy, an analyst with Donaldson Lufkin Jenrette, said Apple's world market share could grow into the "double digits" in the next few years. Mr. McCarthy raised his 12-month target price on Apple to $140. He also raised his 1st quarter estimate to $0.90 from $0.87 and raised his gross sales target by $100 million to $2.1 billion in the quarter.
"Demand for the entire range of Apple's products, from the new consumer iBook and multi-model iMac series to the professional PowerMacs and PowerBooks, is very robust and supply is improving," according to Mr. McCarthy.
JP Morgan also raise its price target on Apple to $115, saying AAPL will "remain popular with investors gauging Apple's competitive momentum in the consumer PC market, robust anticipated consumer spending overall, and the likelihood of great excitement at the MacExpo trade show."
Apple was up 3 5/16 to end the session at 97 7/8 on above average volume of 7.5 million shares traded.
The Dow gave up 70 points (0.64%) to close at 10877.81 on a volume of 956 million shares traded. The Dow was up as much as 100 points, but lost it all in the last hour.
The Nasdaq lost 85.16 points (2.49%) to end the session at 3336.21 in what was the first really big sell-off in this recent run up. Volume was very strong at 1.5 billion shares traded, the forth largest Nasdaq volume on record.
A healthy dose of profit taking was administered by investors in every tech sector. Some of the downside was attributed to end of the month balancing of accounts by fund managers. However, Nasdaq 100 futures, which represent the high tech stocks, were down over 3.00% in late trading, indicating that the profit taking will continue tomorrow.
The S&P 500 lost 18.92 (1.34%) to close at 1388.91.
30-year Treasury bond were up 7/32 to close at 97 24/32, the yield fell to 6.29% from 6.30% yesterday. Bond traders are calling it an "oversold technical bounce", not the start of a new up trend.
November employment numbers are coming out on Friday, that should give traders some idea of the Fed's direction next year.
Consumer confidence rose this month to 135.8 from 130.5 in October after four months of steady decline. A rating of above 90 is considered good, so 135 must mean consumers are besides themselves with euphoria.
The National Chicago Purchasing Manager Index for November was down to 56.8% from 58.8% in October, a bearish sign for bonds.
Today was a mixed bag for Apple related stocks. Akamai continued to defy gravity up 10 points to 237. Arm Holdings advanced 3 3/4 to close at 148. While Adobe lost 2 7/8 to end at 68 11/16. Macromedia got clobbered, down 3 5/8 to close at 65 3/4.
Apple's Power PC partners, Motorola and IBM were both down. IBM declined 1 1/8 to close at 103 1/16, while Motorola gave back 5 1/4 to end at 114 1/4.
Apple's competitors were lower across the board. Gateway got the big boot from investors down 2 3/4 to close at 76 3/8. Hewlett-Packard and Compaq joined them in the losers circle. Only Microsoft advanced on the news that their lawyers are in Chicago to discuss a settlement with the DOJ.
Dell came out today with a consumer desktop PC priced between $1,000 and $2,349 depending the configuration. The Webpc as it is called comes in four iMac-like colors as well as forfeiting the legacy ports and floppy drive.
Investors weren't impressed, Dell shares traded down 3/4 to close at 43. The hurdles Dell will have to overcome to be successful in the new user market space are its lack of a retail presence and the fact that new users demand pampering which could put added pressures on Dell's margin.
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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