Markets Pause for a Breather, Apple Gains 4.49%

The blue chips of the Dow held steady due to some positive earnings reports from Old Economy corporations. On the other hand, the Nasdaq and the technology stocks wilted after last weekis excitement. Apple continued higher off recent lows.

There seems to be a kind of persistent sense of gloom over technology stocks, as if investors are still hung over from the tech stockis big party last winter. Traders and analysts are split on whether we have seen the worst of the tech stock bear market yet.

Richard McGinn, Chairman and CEO of Lucent Technologies Inc. (LU), was forced to resign after his failing product strategy sank Lucentis sales and profit outlook yet again. Former Lucent chairman, Henry Schacht, will be replacing him temporarily. Lucent closed down 0.1x to 22.50. The telecommunications equipment maker reported earnings this afternoon of $0.18 per share, beating the much slashed estimate of $0.17 but lower than $0.25 last year at this time.

Market research firm, Dataquest, clocked worldwide PC shipment growth in the third quarter at 15.2%, while IDC, another market research firm, claims PC shipments grew by 18.3%. The Asia Pacific region appeared to be the strongest for PC sales and European sales were somewhat slower than expected due to the weak Euro.

US PC shipments grew only 9.5% according to IDC. According to upside.com, IDC "sees consumer demand, however, driving up fourth-quarter shipments to a 20 percent growth rate. IDC analysts remain optimistic about the fourth quarter, saying problems in the PC sector are vendor- and segment-specific." Dataquest, using different methods arrives at a forecast for US fourth quarter PC sales growth of 16-18.6%.

Compaq holds the top spot in worldwide PC sales with 13.1% of the total market. Dell comes in second with 11.5%. HP is third with 7.8% (and a remarkable 40% growth rate). IBM is fourth with 7.4% and NEC is the fifth largest PC vendor.

Appleis stock climbed 7/8 to close at 20 3/8 on volume of 9.7 million shares. AAPL climbed a dollar in the morning and then held it with tenacity even as the other PC stocks took a beating in the afternoon.

It was kick Steve-Jobs-Around-Day in media. As usual whenever the chips are down you can count on dimwitted pundits to hype the hype. Forbes and John Dvorak, never friends of Apple, attacked Mr. Jobs as someone who is perfect for Hollywood, "Itis where he belongs--a snake pit of mean-spirited people doing deals, acting glamorous, lording over the little people."

The Nasdaq lost 14 points to close at 3468 on volume of 1.6 billion shares. There were semiconductor and biotech rallies today, even while computer hardware stocks were mostly lower.

The Dow climbed 45 points (0.44%) to close at 10271 on volume of 1.02 billion shares.

The S&P 500 lost 1.16 points (-0.08%) to close at 1395.77.

In Apple related businesses: Akamai shed 5/8 to 55 3/4. Red Herring had some positive comments about Akamai and the Internet content delivery biz in general.

Adobe bounced 1/2 to 140 9/16. Earthlink continued to climb off last weekis low by 7/32 to 7 11/32. IBM lost 1 7/8 to 92 7/8.

Appleis competitors: Dell slipped 15/16 to 27 1/2. Compaq lost 0.93 to 27.70. Intel climbed 1/4 to 43 5/16. Hewlett Packard gained 2 3/8 to 98 3/8.

Shares of Microsoft nose-dived 3 1/6 to 62 1/8 after last weekis amazing two-day gain of 30%. Steve Ballmer, Microsoftis CEO, was at it again — Mr. Ballmer speculated, "I think the stock market, with some exceptions, is now very rational. I do think there are some companies that are dramatically overvalued, and that we can expect to see more correction."

Gateway was lower by 2.58 to 54.40. Gatewayis CFO, John Todd said the company is no longer a pure PC vendor any more. "In the third quarter," an upside.com report noted, "Gateway derived only half its revenue from personal computer sales. Less than two years ago, the company made 95 percent from hardware sales. The other half of this yearis third-quarter revenues came from the sale of software and services." The cow-box PC vendor was also little effected by the European sales slowdown since it has little exposure on the Continent.

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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