After yesterdayis time warp back to the heady days of irrational exuberance, we were sadly reassured that we are in fact still in the middle of a bear market. The big factor that brought stocks back down in todayis trading was a less than good March Employment Report. Weill let Reuters explain it:
"The important new piece of information today was that the economy is weak. The selling that that provoked in stocks reinforced the bearish feelings about the economy," said Dana Johnson, head of research at Banc One Capital Markets.
The Labor Department said nonfarm payrolls were unexpectedly soft, dropping 86,000 versus a rise of 58,000 forecast by economists polled by Reuters.
Unemployment upticked to 4.3 percent, as expected, and average hourly earnings rose 0.4 percent, slightly outpacing the 0.3 percent forecast.
That set the markets off on negative streak, and despite some afternoon gains, they never recovered. At the same time, the employment numbers are being taken as encouragement that the Fed will continue to lower interest rates in an attempt to stimulate the economy. According to CBS Marketwatch:
"These numbers inevitably increase the chance of a quick Fed ease," agreed Ian Shepherdson, chief U.S. economist with High Frequency Economics in Valhalla, N.Y. "If retail sales and Michigan [consumer] confidence drop next week, the Fed will have little choice" than to cut rates ahead of their May 15 meeting.
Energy concerns also added to the negative sentiment, including a bankruptcy filing from PG&E. It seems that buying electricity from unregulated sources and charging regulating prices to consumers doesnit add up, but that seems like such a good idea... Sticking in the craw of many who would otherwise ignore that discrepancy is the fact that PG&E was able to pocket billions in profits when that aspect of Californiais approach to energy management worked in their favor. None-the-less, energy is increasingly becoming an area of concern for Wall Street.
Volume on both the Dow and the Nasdaq was light today. There is still a large cash position on the sidelines.
Tech stocks ended the day down across the board. All of the stocks we track in the Stock Watch ended the day in negative territory, including Dell, whose Q1 announcement yesterday helped sparked the rally yesterday. Motorola had its own share of problems as reports circulated that the company faced liquidity problems (meaning that they were running short on cash). Motorola flatly denied the reports, but the stock took a hit anyway. Motorola derives much of its revenue from the cell phone market, though there are many other areas for the company.
We have several items of Apple related news today too. First off, we have an excellent editorial about Dellis recent attacks on Apple that we would like to recommend. SmarMoney has published an analysis of Dell. Apple, and other PC stocks that we would also like to recommend. In an unrelated note, Wit SoundView lowered their estimates for Apple for Q3 and kicked a note warning of a "moderate risk" for the just completed Q2. We have a full report on this, and a thread in our forums about the issue as well.
Appleis stock traded lower, but held its own in light of the larger sell off. Apple traded lower by 28 cents, but managed to crest above yesterdayis close on four separate occasions. Each time, the stock immediately gave back those gains. A late afternoon rally regained most of that loss, but still left AAPL in negative territory. The stock traded in light volume in a range of 19.9 - 21.04.
Apple closed at 20.59, a loss of 0.28 (-1.34%), on light volume of 5,801,600 shares trading hands.
The Nasdaq closed at 1720.36, down 64.64 (-3.62%), on volume of 1,841,645,000 shares trading hands.
The Dow closed at 9791.09, a loss of 126.96 (-1.28%), on volume of 1,266,890,000 shares trading hands.
The S&P 500 closed at 1128.43, down 23.01 (-2.00%)).
Akamai gave ground today as the company announced they would be cutting jobs. Todayis losses didnit erase yesterdayis gains, however. AKAM closed at 7 7/32, down 9/32 (-3.75%), on strong volume of 3,080,200 shares trading hands. Apple is a large shareholder of Akamai.
Adobe announced a 35% increase in SE Asian sales. They also saw coverage initiated by FAC/Eqts First Albany at a Buy rating. ADBE closed at 34.05, a loss of 0.85 (-2.44%), on volume of 4,666,900 shares trading hands.
IBM closed at 97.95, a loss of 0.26 (-0.26%), on strong volume of 13,424,200 shares trading hands.
Motorola was hammered today, losing 23% even after regaining some lost ground in the late afternoon. MOT closed at 11.50, a loss of 3.45 (-23.08%), on quintuple the normal volume of 64,553,300 shares trading hands.
Earthlink held its ground today on very light volume. ELNK closed at 11 5/16, a loss of 1/16 (-0.55%), on light volume of 721,300 shares trading hands.
Gateway gave up all of yesterdayis gains, and then some. The stock closed at 14.69, down 1.81 (-10.97%), on strong volume of 3,994,300 shares trading hands.
Dell closed at 24 13/16, a loss of 3/8 (-1.49%), on strong volume of 46,238,300 shares trading hands.
Intel closed at 23 5/8, down two points (-7.80%), on heavy volume of 73,966,496 shares trading hands.
Microsoft closed at 56 3/16, a loss of 9/16 (-0.99%), on strong volume of 46,312,100 shares trading hands.
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 updated Apple Stock Watch Special Report. You can also check out our Apple Financial Boards, a new moderated forum for Apple Investors and people who are interested in Appleis financial dealings.