AAPL Rockets Ahead as the Nasdaq Breaks Down

Itis the same story as last week. Surging oil prices, a weak euro and a slowing economy add up to investors fearful of lower than expected corporate profits. Stocks got hammered accross the board. Apple defied the trend soaring almost 10%. Perhaps because Mac OS X Public Beta rocks while Window ME sucks. Just guessing. grin

Red Herring struggled to explain why Oracle (ORCL) and Red Hat (RHAT) got taken apart by Wall Street on solid, or, in Red Hatis case, at least on track earnings, while Adobe (ADBE) just keeps going higher: "So far this earnings season, itis clear that it will take more than strong earnings to get a rise out of Wall Street. In fact, itis probably going to take large revenue gains, solid numbers in all areas of a companyis business, and an extremely positive outlook for the future as well. Itis something to keep in mind as an onslaught of earnings reports descends upon us." Is Wall Street telling us it expects just those sort of strong numbers from Apple Inc. when the company reports earnings later this month?

Apple soared 5 27/64 or 9.82% to close at the dayis high of 60 10/16 on almost twice normal volume of 7.5 million shares. There was no breaking news to account for AAPLis meteoric performance today. Only Appleis extremely under valued position when viewed through the future profit lens of Mac OS X, the G4 Cube and the promise of new products in development combined can explain todayis happily anomalous activity.

The Smithsonian Institutionis Cooper-Hewitt, National Design Museum bestowed upon Apple a great honor today:

"The National Design Award for Corporate Achievement was bestowed upon Apple Computer, Inc., of Cupertino, California, creators of the revolutionary Macintosh and iMac computers. Apple -- its founder Steven Jobs and its exemplary design team headed by Jonathan Ive -- was praised for a consistently inventive application of groundbreaking but user-friendly design to create widespread advances in personal computing. Since its founding in the 1970s and its introduction of the Macintosh in 1984, Apple Computers has secured a place in cultural history by inventing -- and then daring to reinvent -- a product that negotiates between high technology and basic visual and verbal instinct with singular results. The Apple computer is now as much a part of contemporary American daily life as the television and the automobile."

The Nasdaq fell 108 points (-2.83%) to close at 3726 on volume of 1.6 billion shares. CNBC labeled it "the worst September in a decade" so far for the Nasdaq, which is now down 11% for the month and back to where we were on August 2nd.

OK, take a deep breath, looks like the Nasdaq is going to retest the lows of May. The Nasdaqis August rally failed to reach the high side of the upward trending channel before turning down and now we are mere points away from breaking out to the downside of the channel. This means we can forecast the Nasdaq will test support in the 3000-3200 range. The real question: Is this the next big buying opportunity?

The Dow fell 118 points (-1.08%) to close at 10808 on volume of 956 million shares. The Dow deteriorated technically today-- declining stocks swamped advancing by a 3 to 1 margin and new lows beat out new highs for the first time in a long while. The S&P and Dow are now below their 200-day moving averages for the first time in 6 weeks. Meanwhile, crude oil futures set more new highs.

The S&P 500 dropped 21.30 points (-1.45%) to close at 1444.51.

In Apple related businesses: Akamai lost 1 1/4 to 59 7/8. Akamai recently sued Digital Island (ISLD) for infringing on a patent awarded to the Massachusetts Institute of Technology and licensed to Akamai. Now Digital Island is counter suing Akamai.

Adobe soared 9 3/8 to 142 dollars, just shy of the all time high, perhaps on last weekis stellar earnings report and news of a 2 for 1 stock split. 10 of the 12 analysts who follow ADBE rate it a buy or strong buy. Earthlink fell 1 5/16 to 10 3/8. Motorola lost 1 11/16 to 33 5/16. IBM declined 1 3/4 to 123 1/4.

Appleis competitors: Dell shed 1 5/16 to 34 7/16, a 52-week low. Michael Dell, founder of Dell Computer, has sold $959 million of his investment in Dell. A C/NET article reported on the heavy insider selling going on in tech stocks this year, "In July, insiders sold 22 times as much stock as they bought, compared with the typical ratio of 10 times as much. The highest ratio of insider selling to buying was 23 in February when $9.8 billion of stock was sold just weeks before the Nasdaq peaked above 5000."

Gateway was higher by 0.05 to 59.20. Ted Waitt, founder of Gateway, sold $482 million of his investment in Gateway this year.

Compaq gave back 5/8 to 29 5/8.

Shares of Microsoft dived 1 3/16 to 63 dollars. Paul Allen, co-founder of Microsoft, takes the cake with an amazing $6.5 billion sell-off of his stake in Microsoft in 2000. Microsoft executives continue to sell their MSFT shares even though the stock is far from its 52-week high of 120 dollars. Co-founders Bill Gates and Paul Allen plan to sell another $109.3 million of MSFT soon. A C/NET article notes, "In the past three months, Gates has sold 4.15 million shares valued at about $291.2 million, while Allen has sold 16.26 million shares valued at about $1.2 billion, according to the SEC documents."

Hewlett Packard gained 5/16 to 103 1/8 after CEO, Carle Fiorina, said the company was "fairly on track for the fourth quarter."

The Mac Observer Stock Watch Virtual Portfolio Lucent (LU) fell 1 15/16 to 35 3/4 a new 52-week low. Akamai is near its all time low of 56 5/8.

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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