Volatile Week Ends on a High Note, But Apple’s Stock Languishes

More evidence that the economy really is slowing rallied the stock markets Friday, especially the blue chips of the Dow. Appleis stock churned near 52-week lows.

The much weaker than expected gross domestic product in the third quarter means the stock markets wonit have to worry about the Feds raising interest rates again in November.

Meanwhile, as the great earnings and growth at JDS Uniphase (JDSU) sink into investorsi collective consciousness, the recent panic selling in the optical networking stocks seems a bit over done.

Appleis stock rose by 1/16 to close at 18 9/16 on volume of 13 million shares.

The Nasdaq gained 6 points to close at 3278 on volume of 1.89 billion shares, but it was higher by 97 early in the morning. Biotech stocks sold off Friday.

This week the Nasdaq traded down 223 points (5.9%) in about a 500 trading point range. Last year the Nasdaq had only 10 days of triple digit trading ranges, this year there has been 130.

The Dow rallied 192 points (1.85%) to close at the dayis high of 10572 on volume of 1.05 billion shares. The Dow has cut the declines of the last 6 weeks by 40% in the last two week — 400 points of it just this week. Cyclical stocks continued to perform well, an indication that investors donit see the recent deceleration in GDP growth as a sign of an impending recession.

The financial stocks attempted a break out to the high side from recent trading ranges. Energy stocks, especially oil service stocks, sold-off.

The S&P 500 climbed 14.82 points (1.09%) to close at 1379.26, and for the week rose 2.2%.

In Apple related businesses: Akamai lost 5/16 to 48 11/16. IBM climbed 15/16 to 93 11/16.

Adobe rallied 2 3/8 to 74 13/16 after settling a copyright and trademark lawsuit against a reseller who was distributing academic versions of Adobe software to retail consumers. Colleen Pouliot, an Adobe VP said, "This landmark decision leaves no room for doubt: software distribution outside the scope of a license agreement is copyright infringement."

Appleis competitors: Dell gained 3/16 to 27 15/16. Intel climbed 1 11/16 to 46 3/8. Hewlett Packard climbed 1 3/16 to 87 3/16. Gateway was higher by 2.44 to 50.29.

Shares of Microsoft rallied 3 1/4 to 67 11/16. Hackers broke into Microsoftis database and might have swiped or even modified the source code for Windows and MS Office during the three months they had access to Redmondis crown jewels. Steve Ballmer, Microsoftis CEO, told reporters, "They did in fact access the source codes."

Compaq gained 0.05 to 29.95. The worldis largest PC vendor plans to recall and replace about 55,000 battery packs for its Armada E500 and V300 notebooks after discovering the batteries, "can short-circuit, causing the notebooks to overheat, smoke and even catch fire," according to a C/NET News report.

In economic news: US gross domestic product grew at a 2.7% annual pace in the last quarter, down from the 5.6% rate of the second quarter and closer to what the Federal Reserve believes is sustainable. However, the rapid cooling of the economy was greater than economists had predicted. Much of the drop in GNP growth was due to a slow down in spending from the federal government.

The Wall Street Journal reported:

"While the Fed has been trying to slow growth to stave off inflation, last quarteris unexpectedly figures could fan concerns that the economy is cooling too quickly. Fridayis advance report is the first of three government looks at GDP for the quarter, however, and large revisions are possible."

Meanwhile, inflation rose slightly to 2.2% in third quarter from 2.1%.

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.

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