Sun Pushes Techs Higher On Low Volume Day

August 26th, 2002 at 3:00 PM - Apple Stock Watch by Robert Paul Leitao

All Hands On Deck, All Eyes On HPQ

On Tuesday HP will release quarterly results for the latest three-month period. Technology industry analysts will be on alert, watching carefully for signs that HP is showing real signs of cost savings following the massive HP-Compaq merger and that the combined company can compete efficiently in a challenging IT market.

HP chairperson Carly Fiorina has previously stated publicly that she does not foresee an up tick in IT spending anytime in 2002 and the companyis growth estimates for 2003 are somewhat muted. HPis earnings growth in the short-term will come from post-merger cost savings and its new line of printers. HP forecasts 2003 revenue growth of only four to six percent as IT executives slowly return to buying table.

The Incredibly Expanding Dell

Despite tough talk to the contrary, it appears HPis attention to merger issues, and the companyis desire to squelch concerns raised by anti-merger crusader Walther Hewlett that HPis printer division would be the big casualty of the merger, sales of computers to consumers is not currently a top HP priority. Dell Computer, the ever-growing PC maker, has taken a chunk of business from HP in the consumer and enterprise markets. Dellis agility in a challenging market has helped to keep its stock price high and has earned the company the respect of Wall Street.

Monday Market Activity

The markets attempted to move higher in early Monday trading but buyers apparently took the morning off following Fridayis profit-taking session. Within the first hour of trading the major indexes dropped into negative territory and by the noon hour the markets were trending to significant session lows.

In afternoon trading the markets climbed back into positive territory. Computer hardware maker Sun Microsystems jumped more than seven percent intra-day trading on news of new products. By the closing bell the indexes had moved to modest gains on the day. The Dow Jones Industrial Average moved up 46.05 to close at 8,919.01. The S&P 500 Index advanced 7.09 to end at 947.95. The NASDAQ Composite Index finished up 11.12 to stand at 1,391.74. Apple closed off $.20 to close at $15.53.

Gateway

Gateway has introduced a new all-in-one PC with which it intends to battle Appleis iMac in a head-to-head campaign. What Gateway may misunderstand in rolling-out its expensive campaign to support the new product, is that while Appleis LCD iMac and high-profile "switch" campaign may appeal to some Windows users in the market for a new PC, Gateway is being torn apart not by Appleis success, but by Gatewayis inability to compete in its primary market for users of Windows PCs. Whether or not Gatewayis latest campaign is an act of desperation, or simply a capitulation that it can not compete with Dell and other Wintel PC makers in the consumer space, may be determined by the companyis September sales of the new product. Please see the TMO coverage of Gatewayis product announcement, or join in on the discussion of this issue in our forums.

Apple

The weekend marked the release of the highly touted upgrade to Appleis Unix-based operating system. Mac OS X, 10.2 code-named "Jaguar" was made available for sale at special selling events late Friday night. Please see the TMO special report on the release party for OS X held at Appleis Valley Fair store.

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