A Disappointing Monday as Computer Hardware Stocks Fall

Stocks were mixed as the week started on a cautious note ahead of the flood of corporate earnings reports expected in the next five days from Intel, IBM, Apple, Sun Microsystems, AOL and many others. Appleis stock sagged a bit, but it wasnit anything compared to the bludgeoning investors dealt Microsoft, Dell and Intel.

The NYSE floor traders are saying that the October sell-off (before Fridayis incredible bounce) didnit really have the markings of a classic market bottom. Notably absent was the frantically high volume usually associated with true capitulation. Nevertheless, if last weekis low wasnit the bottom, it was close. The consensus is for the markets to trade sideways while investors look and wait for tangible economic evidence to give direction to the stock markets.

Appleis stock fell 9/16 or 12.55%, after climbing a dollar in the morning, to close at 21 1/2. AAPL sold-off about 7/16 in the last five minutes of trading as tech investors became more pessimistic about the staying power of last Fridayis rally.

Reuters warned Apple to watch out. A new VAIO laptop computer is blue-black translucent and another model blurs the line between camcorder and laptop into a chimera that looks like it came off a Star Wars set rather than a CompUSA shelf.

Mac heads are dissing author Alan Deutschman for his searing book, The Second Coming of Steve Jobs. But in this interview with CBS MarketWatch he sounds like an OK guy with some real insights into Appleis potential.

Sun Microsystems said that StarOffice, a unix based productivity suite which includes tools such as word processing, spreadsheets, presentations, drawings, web-publishing, e-mail, scheduling, and database applications will be available for the Macintosh platform in the first half of next year. For free! Good bye, MS Office 2001.

The Nasdaq gave back 26 points (-0.80) to 3290 on volume of 1.7 billion.

The Dow rallied 46 points (0.46%) to close at 10238 on volume of a billion shares traded. Crude oil prices fell by $1.83 to $32.30 as the face-off in the Middle East cools and news surfaces that Iraq wonit be turning off its oil production after all.

The S&P 500 climbed 0.44 points (0.03%) to 1374.61

In Apple related businesses: Akamai climbed 3 7/8 to 52 7/8. Adobe lost 3 5/16 to 141 13/16. Earthlink lost 9/16 to 6 15/16. IBM jumped 2 dollars to 111 1/16.

Sun Microsystems soared 3 9/16 to close at 114 9/16 after the company announced, "the availability of the StarOffice source code on OpenOffice.org. In an attempt to drive standardization for technologies for office productivity suites, Sun also released the XML file formats and StarOffice API specifications."

According the press release, StarOffice will be available for Macintosh, "during the first half of next year." Thus it may not matter that MS Office 2001 wonit be carbonized in time for Mac OS Xis debut. Who needs to pay for MS Office when you can have StarOffice for free?

Appleis competitors: Although no analyst has commented on it yet, as the chances of StarOffice eating MS Office for lunch increase, shares of Microsoft nose-dived 3 5/16 to close at 50 7/16, handily beating out MSFTis old 52-week low of 52 1/8.

Microsoft reports earnings on Wednesday and analysts expect the company to report earnings of $0.41 per share thatis an increase of only 8% over the $0.38 reported a year ago. Rumors abound that the Redmond giant may guide forecasts lower for next quarter.

Intel dipped 4 11/16 to 35 11/16 as analysts warn the MHz war between Intel and AMD is about to break out into a full-fledge price war in which the only winner will be consumers.

Dell got chiseled down by 1 15/16 to 25 3/8. Compaq gained 0.16 to 25.36. Hewlett Packard gained 2 1/8 to 92 3/4. Gateway was lower by 2.30 to 50.81.

In economic news: Inventories climbed in August by 0.7%, the strongest showing in 2 months with stocks on retail shelves growing the fastest. Rising retail inventories are just one more sign of a slowing economy, however retail sales also advanced by 0.5% in August to $902.3 billion.

The Wall Street Journal reported, "Augustis sales increase pushed the inventory-to-sales ratio to 1.34 months, meaning it would take 1.34 months to exhaust inventories at the August sales pace. That was the highest since September 1999. In July, the ratio stood at 1.33 months."

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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