September 23rd, 1999

[4:30 PM] Apple Stock Watch: Apple Tumbles Another 10% In Market Bloodbath

Apple's stock plummeted again today in one of the bloodiest days on Wall Street in the last several years. Tech stocks started a sell-off that quickly spread to the rest of the markets and eventually brought the Dow below the 200 Day Moving Average, a number considered to be a key support level. Breaking below that level is considered a possible signal that the markets could head even lower. According to a Reuters report:

The Nasdaq composite index fell an unofficial 107.67 points, or 3.77 percent, to 2750.50 -- the fourth largest point decline in Nasdaq history. Declining issues swamped advancers by 2,629 to 1,227 on volume of 1.15 billion as 111 stocks made new lows against 84 new highs.

"It was holding up the best by far and it is just succumbing with pressure that's been prevalent in the rest of the market," said Robert Dickey, an analyst at Dain Rauscher, about the Nasdaq.

The Dow Jones Industrial Average lost 205.48 points to close at 10318.59 while the Standard & Poor's 500 index fell below the 1300 support level, closing down 30.11 at 1280.40.

"We broke under that 10,500 level with gusto today and I think that means we will follow through. Investors should not trust an up opening," he said. "On a relative basis, the big caps and the Nasdaq will hold up better than other indices."

Steve Ballmer, the balding President of Microsoft, also caused a ruckus when he announced publicly that he felt tech stocks were overvalued. According to a report from The Motley Fool:

President Steve Ballmer caused a row in tech stock-land today after reportedly making some comments that the valuation levels of technology-related companies are overblown. "There's such an overvaluation of tech stocks it's absurd," Ballmer told a gathering of the Society of American Business Editors and Writers, according to Bloomberg News. "And I'd put our company's stock in that category."

Apple ended up falling 7 points to close at 63 5/16, a loss of 7 or another 9.96% on top of the 12.41% it fell on Tuesday after issuing an earnings warning. SInce its record high reached on Monday's closing of 79 1/16, Apple has fallen some 19.90%. Volume continued to be heavy with 10,204,80 shares trading hands. Combined with the shares traded on yesterday and Tuesday, Apple has had almost 3 times normal weekly volume in just the last three days.

The damage was not limited to Apple however. Macromedia, Motorola, and Symantec also saw losses, though Adobe managed to post a 1 point gain. On the PC front, all the major players also got bloody noses with Intel, Microsoft, Dell, IBM, Gateway 2000, Hewlett-Packard, and Compaq all closing lower.

The Dow closed at 10318.59, a loss of 205.48, while the Nasdaq closed at 2749.83, down 108.33.

For full quotes for all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have these same quotes reported live (20 minute delay) on our home page. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.

The Mac Observer Spin: Hear, hear! Mr. Ballmer! For once we agree with you, Microsoft's stock is certainly overvalued as are many tech and Internet stocks. Apple is the one exception, being vastly undervalued when compared to the rest of the bloated tech and Internet stocks.

As for where we will go next: Analysts spent the day answering the question of "where is the bottom of this market?" by asking "Where is the bottom of this market?" A viscous circle indeed. There seem to be very few people who know what's going to happen next, and that most certainly includes The Mac Observer. It is possible that investors could once again look at Apple as a safe stock due to its very low P/E ratio, but it is also possible that Apple's stock will remain mired in the muck of the tech sector until good news like the impending iMac upgrade is announced. It is also possible that Apple will simply continue to be swept along by overwhelming market forces no matter which way the tide runs.