Wall Street finally got the good news they had been hoping for when May's Consumer Price Index came in today. The Street had been fearing inflationary numbers that would have prompted the Fed to raise interest rates, a move that would hurt the stock market. This fear has helped keep the market flat while sending Apple's stock steadily down for the last few trading sessions. Today Apple rebounded almost two points putting the stock a hair's breadth from 48. According to CBS MarketWatch:
An unchanged reading on May consumer price inflation stoked a bonfire beneath the technology sector Wednesday, leading to hefty gains in nearly every computer-related segment.
"The important story is that inflation may turn out to be higher than expected in 1999 and 2000 -- but not alarmingly higher," said Hugh Johnson, chief investment strategist at First Albany Corp.
"The New Paradigm thesis [of robust growth without troublesome inflation] is still very much alive and well. It's not yet in tatters."
This was backed up by analyst Kurt King in another report by CBS MarketWatch.
Kurt King, analyst at Bank of America Securities, told CBS.MarketWatch.com, along with Oracle's earnings, "probably more importantly, it looks like the CPI [consumer price index] numbers showed stability, as opposed to inflation. That's enough to get these stocks bid up."
Apple closed at 47 15/16, up 1 7/8 or 4.07%. Volume continues to be low with 2,009,100 shares trading hands.
All of Apple's PC competitors also shared in the uplift with IBM, Compaq, Gateway 2000, Hewlett-Packard, and Dell all closing up.
The Dow closed at 10784.95, up 189.96 points while the Nasdaq also saw big gains closing at 2517.84, up 103.17.
Check out the Apple Stock Watch Special Report for more news on Apple's stock performance.
The Mac Observer Spin: With inflation worries seemingly calmed, it can be hoped that Apple will continue to rise again and possibly top the elusive US$50 mark.
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