August 10th, 1999

[3:30 PM]
Apple Stock Watch: Apple Closes Up As PC Vendors Were Hammered
Apple's stock closed higher today, despite starting off in negative territory. Apple rallied later in the day to close up, while PC vendors were mostly hit. Fears of an interest rate hike looming closer may have played in Apple's favor according to one Wall Street Analyst. Eric Blachno, managing director at Pennsylvania Merchant Group, was quoted by CBS Marketwatch as saying that stocks with higher price to earnings ratios were going to take it on the chin. According to CBS Marketwatch:

"They are getting creamed again," said Eric Blachno, managing director at Pennsylvania Merchant Group. "The valuations for some of these stocks, by standard, historic measures, are clearly very high. "In a not as favorable interest rate environment. . . what do you take down first? You take down the high PE [price earnings ratio] stocks."

A quick look at the top 6 hardware companies shows that Apple has the lowest P/E in the industry.

Company
P/E
Today's
gains/losses
IBM 30.17
-2 7/8
Compaq 31.95
-7/16
Hewlett-Packard 35.19
-13/16
Gateway 2000 31.30
0.0
Dell 71.93
-9/16
Apple 14.75
+15/16

Today's results suggest that Mr. Blachno's analysis may indeed be correct.

Apple closed at 55 3/8, a gain of 15/16 or 1.72%). Volume was moderate with 3,709,200 shares trading hands.

IBM, Dell, Hewlett-Packard, and Compaq all closed down while Gateway 2000 managed to close unchanged.

The Dow and the Nasdaq both closed in negative territory. The Dow closed at 10655.15, a loss of 52.55 while the Nasdaq closed at 2490.11, down 28.87.

The Mac Observer Spin: The mantra in looking at the stock market is that one day does not a trend make. At least it's our mantra. Apple has languished with the lowest P/E for years and it would be fitting if that actually had the effect of lifting the stock at long last.

Apple