AAPL Continues to Rally

After a negative start, tech stocks pushed the Nasdaq up for the ninth day in a row. Old economy stocks on the Dow didnit like the surge in crude oil prices, but still managed to close slightly higher after flat-lining most of the day. Appleis stock is definitely in rally mode, up over 5% today.

Crude oil inventories have dropped 15% since May to their lowest levels since the 1976 energy crisis. In response crude oil prices are up 5% just today. Even if OPEC raises production levels at their next meeting on September 10th the increased supply wonit be refined in time to effect demand this winter. US refiners are humming at 96.9% of operable capacity. Worse, the OPEC nations have just about tapped out all their unused production capacity, so future increases can only come from capital investments in infrastructure expansions, which means the price of oil could remain high for at least another 18 months during the build out.

Appleis stock climbed 2 5/8 or 5.08% to close at 54 5/16 on volume of 4.2 million shares.

Recently, Appleis stock has received some bullish recommendations from analysts.

Monday, an ON24 audio news report predicted that Apple will trend to $75 per share later this year, because while Apple is growing at a rate comparable to its PC peers, Appleis P/E of 27 is about half the industry average of 56. The report also provides an overview of Appleis financial news since MACWORLD in July.

Yesterday, MacCentral reported that, "DEAglobal, a group of analysts that provide online research... sees potential for shares of AAPL to reach their previous highs, of approximately $75, later this year."

However, an individualinvestor.com story notes:

"In conjunction with a strong PC market, Apple had posted strong growth in recent quarters. In fact, Apple is on track to record its most profitable year since fiscal (September) 1992, when it earned $2.16 a share. But after a string of great quarters, Apple stumbled badly in the quarter ended June. Though earnings of $0.45 slightly exceeded expectations, revenue fell well short of forecasts. Sales of Appleis low-priced iMac computer came in far below expectations."

A Reuters article noted that Appleis market share in Japan has fallen from 12.3% last year to 9.9%, even while retail sales in Japanis three major areas rose 28.2% in the April to June period.

The Nasdaq climbed 52 points (1.33%) to close at 4011 on volume of 1.4 billion shares. The Nasdaq is now only 20% below its all time high of 5042 set early this year and up 23% from the May low.

The Dow inched up 5.50 points (.0.05%) to close at 11144 on volume of 864 million shares.

The S&P 500 climbed 7.84 points (0.52%) to close at 1505.97.

CNBC reported that the percentage of financial analysts ibullishi on the stock market fell from 47.1% last week to 43.5% this week, an unusually rapid decline. Meanwhile, the number of ibearishi analysts increased to 33.7% from 31.7%.

In Apple related businesses: Akamai lost 2 5/16 to 69 5/16. Adobe gained 3 13/16 to 126 1/16. Earthlink gained 3/16 to 10 1/8. Motorola lost 1/8 to 36 3/8.

IBM announced that it is "teaming with Avid Technology on a new video-editing bundle for the Web, DVD and other media," said a CNET News article. IBM climbed 1 5/8 to 123 dollars.

Macromedia bounced back 5 1/2 points, after sliding 13 dollars yesterday, to close at 69. US Bancorp Piper Jaffrey reiterated their ibuyi rating on the stock, saying, "July PC data numbers support our belief in a seasonal slowdown; expect quarter to be back-end loaded due to launch of Flash 5 in September."

Appleis competitors: Gateway was higher by 1 9/16 to 64 9/16. Shares of Microsoft fell 1/2 to 70 3/4. Intel climbed 2 1/2 to 74 5/8. Dell gained 1 1/4 to 38 11/16. Compaq gave back 5/8 to 33 3/8. Year-to-date, Dell is down -16%, while Compaq is up 39%.

In economic news: On Thursday, look for Julyis Durable Goods Orders which are expected to decline substantial from Juneis 9.7% increase to -0.5%, indicating weakening consumer demand. Friday, expect the Gross Domestic Product revision for the second quarter, itis expected to give back a bit to 5.1% from 5.2%.

The Mac Observer Stock Watch Virtual Portfolio was helped by Appleis and IBMis good performances today.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Appleis stock activity, visit our Apple Stock Watch Special Report.

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