A weak Consumer Confidence rating for October helped drag the tech markets south in a Sherman-like sweep through Georgia. A trail of red tech stocks rotting in the wake was all that remained, but the smoke drifting from the wreckage was hope that the Fed would soon cut interest rates yet again. The CCI fell to 79.4, a new 9-year low, and a sharp decline from Septemberis 93.7 measure. Declining CCI is deemed a negative trend because it generally reflects less willingness on the part of consumers to spend money.
As a result, the Federal Reserve is expected to drop rates yet again, to record lows, with a full 50 basis points (a half percentage point) drop. From a Reuters report:
"I reckon Fed easing next Wednesday is a done deal and 50 basis points is more likely than 25," said Rory Robertson, US economist for Australian house Macquarie Equities (USA), who has been consistent in tipping a cut before year-end. "Todayis dramatic drop in the high-profile confidence measure leaves little scope for Fed hawks to keep counseling patience on policy," he said.
When is the last time you heard the phrase "I reckon" in a mainstream financial piece?
Cisco helped with the bad attitude among traders after the companyis stock was hit with downgrades and lowered estimates before trading began. That helped set the tone, especially with networking and other tech stocks. The DOW, on the other hand, managed to end the day just on the plus-side, after a good earnings report from Proctor & Gamble, and a rally in defense-oriented stocks, helped overcame any overriding negative trends.
By the end of the day, the Dow Jones Industrial Average ended at 8,368.94, up 0.90 (+0.01%). The S&P 500 Index finished at 882.15, down 8.08 (-0.91%). The NASDAQ Composite Index fell to 1,300.54, down 15.29 -(-1.16%). On Monday Apple dropped to 15.44, a loss of 0.17 (-1.09%).
Apple Computer
Apple was caught up in the tech downturn, with no specific news helping to bring the companyis stock lower. Yesterday, we reported that Rob Enderle of the Giga Information Group has once again predicted Appleis doom. Mr. Enderle said that the companyis platform was heading towards obsolescence, and that the company would be forced to move to Intel. See our full report for more information and commentary.
While Mr. Enderle was rehashing his groundless arguments concerning Apple, Gartneris Dataquest released a report showing that Appleis share of the server market had almost tripled. The company also moved into the #5 server vendor spot, though far behind #4 server vendor, Sun Microsystems. See our full report for more information and commentary on this.
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