Stock Markets World Wide Stare into the Maw of a Bear Market

Nothing like a serious threat of war in the Middle East to upset Wall Streetis Apple cart. (No pun intended) If the Arab nations cut the world economyis crude oil jugular vein... can you spell recession? Without todayis global mayhem, it appears Appleis stock would have rally above $21.

The Nasdaq broke down below the technically important support level of 3164, the low set 6 months ago. In many ways this break down is more serious than the May correction since this time the economy really is slowing and earnings really are declining, making a rapid come back -- like we experience this summer -- highly unlikely.

Few informed observers believe our fuel supply will be disrupted for any extended length of time by the unrest in the Middle East, but tell that to investors and commodity traders. Crude oil soared over $3 to $37 for a moment of panic this morning before settling back to the $35 range. But experts warn if tensions in the Middle East continue to heighten, $40-plus per barrel of crude is a possibility. Heating oil prices climbed more than 5%.

The Wall Street Journal reported, "Traders and analysts said they hadnit seen anything close to Thursdayis level of panic buying since Iraqis invasion of Kuwait in 1990, which lifted crude futures about $20 to a record of $41.15 a barrel in October 1990."

Appleis stock managed to eek out a 1.91% gain or 3/8 to close at 20 dollars on continued huge volume of 21 million shares. AAPLis price anticipated this Octoberis tech stock slaughter and now may be one of the first to find a bottom and begin the long march back.

The Nasdaq fell 94 points (-2.97%) to close at 3074 on volume of 2.09 billion shares. The Naz is now -39% off its March 10th high of 5048. However, the 52-week low of 2632 is still well below todayis range. As I have been pointing out for days now the tech stocks are highly oversold, but the problem with oversold indicators is they can stay oversold for an extended period of time.

The Dow fell 379 points (-3.64%) to close at 10034 on volume of 1.37 billion shares. Donit let clueless news reports about this fall being the 5th largest point drop in Dow history fool you. Percentage-wise today didnit even make the top 10 declines and thatis all that counts.

Naturally on a day like this precious-metal concerns were mostly higher with gold leading the way. In fact, gold climbed $5.80 to $278.80, itis biggest move in recent memory. Investors all over the globe were rushing to quality, pushing all US treasury bonds higher, in spite of the inflationary effect of higher oil prices, which usually hurt bond prices.

Retail bellwether Home Depot (HD) lost 13 13/16 to close at 35 1/8, after the company, "warned that its third-quarter and full-year earnings will fall short of expectations, primarily because of price deflation in lumber and building materials." Deflation? I thought we were suppose to be worried about inflation? Yet another sign of a macro-economic slowdown.

The S&P 500 dropped 34.86 points (-2.55%) to close at 1329.73.

In Apple related businesses: Akamai shed 2 11/16 to 42 7/8. Adobe fell 19 7/8 to 130 13/16, as profit taking racked this high flying stock. Earthlink fell 1/4 to 6 15/16. IBM shed 8 1/8 to 103 7/8 on fears the company will disappoint.

Appleis competitors: Dell gained 3/16 to 23 3/16. Gateway was lower by .99 to 43.63, look for Gateway to report earnings later this afternoon. Intel bounced back 1 5/8 to 37 dollars. Hewlett Packard lost 1 7/8 to 83 11/16.

Advanced Micro Devices (AMD) reported healthy earnings yesterday, but the stock sank 1 3/8 today to close at 22 1/8. Net income for the quarter was $408.6 million, or $1.18 a share, compared with a net loss of $105.5 million, or $0.36 per share a year-ago. An Associated Press article reported, "Chip maker Advanced Micro Devices posted its first calendar year in the black since 1995, reporting it shattered quarterly sales records as it made significant inroads against arch-rival Intel Corp. in the high-end processor market."

Shares of Microsoft shed 1 3/8 to 54 3/8. Bill Gates said Microsoft will license and build on software from NetIQ (NTIQ) to offer its own network management software. Meanwhile, Apple and Microsoft employees were getting along famously at the Mac-only Microsoftis Office 2001 release party at a downtown San Francisco CompUSA store.

Compaq gave back 1.66 to 22.53. Michael Capellas, Compaqis CEO said the company will have double digit growth in the second half of the year at a retirement send-off for Compaqis founder and chairman Ben Rosen.

According to Reuters:

"Rosen helped bring Compaq into the world when, as a venture capitalist, he agreed to fund a then-revolutionary idea by three engineers, including founder and former chief executive Rod Canion, to create a portable personal computer.They sketched out the concept on a placemat while dining at the House of Pies restaurant in Houston.

From then on, as chairman, Rosen guided the company through two tumultuous management changes, including the departure of Pfeiffer and Canion before him in October 1991. He took over as acting CEO last year and led the executive search that ended with the selection of Capellas."

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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