The markets kicked off the day with soft sigh into the red. It firmly looked to be a losing day across the board as warnings from Compaq and Hewlett-Packard put traders off their milk. The day shifted in the afternoon, however, as the earnings warnings were shrugged aside like last yearis alligator briefcases. Analysts and traders alike decided to focus on the low interest rates and the tax rebate econo-booster checks that will be hitting the economy like a dose of greenback-colored adrenaline. From a Reuters report:
"Some are pessimistic about earnings two quarters out, but theyire probably taking a naive stance. Weive got interest rates and fiscal policy on our side," said Dan Rivera, chief investment officer of American Express Asset Management Groupis large-cap growth division.
"The market continues to shake off the newest (negative) developments," said Keith Gertson, head of Nasdaq trading for Deutsche Banc Alex Brown. "Every day the resistance continues, it builds conviction that the market is building a base. Most people anticipate a rally of 3-5 percent because the market has absorbed the bad news so well."
The markets turned the morning losses into afternoon gains and volume was fairly solid. The Nasdaq traded more than 1.7 billion shares on a gain of 38 points, while the Dow traded 1.2 billion shares and jumped up 122 points. Not too shabby for a day marked by more earnings warnings.
Industry News
HP announced that it would be cutting 6,000 more jobs. The company cited the economy and other negative factors influencing its decision. From a Reuters report:
"Global economic conditions have continued to deteriorate as has tech spending around the world, particularly in the consumer sector," Chairman and Chief Executive Carly Fiorina said, echoing a string of warnings she has made this year. It marks the third consecutive period that Fiorina has had to warn of disappointing results.
IBM has announced that it received US$1 billion in Web hosting contracts during the first 6 months of 2001. Wowza!
Our friends at Microsoft are the subject of a complaint from privacy advocates that say Microsoftis Passport is a huge big fat massive invasion of privacy. Microsoft says that Passport will allow users more control over their personal information, as users hand over all of that information to Microsoft itself. From a Reutersi report:
"This potential to track, profile and monitor uses of the Internet has far-reaching and profound implications for privacy protection in general and in particular with regard to the growth of electronic commerce," the complaint says.
Apple Industry News
Apple announced neither layoffs nor an earnings warning Then again, Apple has not announced layoffs at all during this downturn, and the company was the first to recognize the sales downturn.
Apple started down like the rest of the markets, but also got caught up in the updraft of the late afternoon rally. The stock opened up lower, bounced around the break even line for a while, and then firmly entrenched itself in negative territory. Trading as much as 62 cents lower. Once the semi-conductor rally kicked in, Apple kicked along for the ride. The rally lost steam in the last half hour of trading, and Apple closed 21 cents off the dayis high. Volume was light, and the dayis range was 17.852 - 18.80.
Apple closed at 18.59, up 0.12 (+0.65%), on light volume of 6,612,400 shares trading hands.
The Nasdaq closed at 2022.96, up 38.64 (+1.95%), on volume of 1,764,700,000 trading hands.
The Dow closed at 10455.63, up 49.96 (+0.48%), on volume of 1,216,843,000 trading hands.
The S&P 500 closed at 1202.93, up 12.44 (+1.04%).
Adobe closed at 43, up 1.03 (+2.45%), on volume of 3,266,800 shares trading hands.
Akamai closed at 8.07, up 0.18 (+2.28%), on light volume of 1,314,300 shares trading hands. Apple is a large shareholder of Akamai.
Earthlink closed at 16.82, up 1.12 (+7.13%), on light volume of 1,767,800,100 shares trading hands.
IBM closed at 106.00, up 1.11 (+1.06%), on strong volume of 8,415,300 shares trading hands.
Macromedia closed at 16.55, up 0.30 (+1.85%), on light volume of 434,600 shares trading hands.
Motorola closed at 18.55, up 1.27 (+7.35%), on strong volume of 15,222,200 shares trading hands. Motorola manufactures the processors used in Appleis Macintosh line.
Dell closed at 27.87, down 0.14 (-0.50%), on light volume of 26,795,100 shares trading hands.
Gateway closed at 9.67, down 7 cents (-0.72%), on light volume of 1,478,600 shares trading hands.
Intel closed at 29.78, up 0.36 (+1.22%), on volume of 46,247,200 shares trading hands.
Microsoft closed at 66.59, off by 0.89 (-1.32%), on volume of 38,994,400 shares trading hands.
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