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April 14th, 2000

[4:40 PM] Apple Stock Watch: The Bubble Goes Boom, But Apple Stands Tall!
by Wes George

They'll probably call it Black Friday 2000, or maybe it will be remembered as Gray April. Market corrections--I use that term optimistically--never climax on Friday. Monday is everyone's hope for a bottom and even then more pain is coming. Welcome to a bear market where every uptick is an invitation to short and buyers are as scarce as whooping cranes. Apple held up well considering the meltdown.

There were no institutional buyers today, no one to rushed to save the market from its fate. Everyone sat in fascination on the sideline, jaw bones dropped, just listening to a giant sucking sound. Monday looks like more selling as the margin calls from today begin to kick in.

The Nasdaq burst through the 200-day moving average today for the first time since October of 1998. Interestingly, the long term secular bull market trends in both the Dow and the Nasdaq have NOT been violated. Technically this is not a bear market in the sense of a recessionary or business cycle downturn, it's merely a market bubble bursting and the shock wave is rocking the whole market.

So while we have begun an intermediate term (1 to 6 month) bear trend, the strength of the US economy hasn't changed in the last week. After a reevaluation by investors, stock prices will slowly come back, at least those stocks with good earnings.

Apple lost only 1 15/16 or 1.70%, to close at 111 7/8 on volume of 5.95 million shares.

The Mac Observer Stock Watch Virtual Portfolio got hit hard today especially our shares of IBM and Akamai. the TMO portfolio is down over 6% for the week, though that is much better than the markets performed as a whole.

The Nasdaq crashed 357 points (-9.7%), to crush the old single day point loss record of 349 set April 4th. The market closed at 3321 on volume of 2.48 billion shares traded. It was the second biggest daily percentage drop in history for the Nasdaq. The Nasdaq is down 35% from the March 10th high of 5048 and down 25% for the week, the worst one week hammering ever.

The Dow declined 617 points (-5.66%) to close at 10305 on volume of 1.26 billion shares. Dow is down over 5% for the year. Today was the largest point drop in Dow history, but it could have been worse, the dow was down over 700 points earlier.

The S&P 500 sagged 83.96 points (-5.83%) to close at 1356.56.

In Apple related businesses: Akamai lost $25 billion in market capitalization this week, today the stock lost another 23 1/8 to close at 64 7/8. ARM Holdings lost 18 1/16 to close at 134 3/8. Adobe lost 15 3/4 to close at 97 13/16. Earthlink lost 1 1/2 to close at 11 5/16. Macromedia lost 15 7/16 to 44 13/16. Motorola lost 6 3/16 to close at 110 13/16. IBM lost 4 5/8 to 106 dollars for a 15% decline in price this week.

Apple's competitors: Hewlett Packard lost 8 15/16 to close at 123 dollars. Intel lost 10 5/8 to close at 110 1/2, Intel lost 22% this week. Gateway lost 1/2 to close at 51 1/2. Compaq lost 1 1/8 to close at 25 1/8. Shares of Microsoft lost 5 1/8 to 74 1/8 for a new 52-week low. Microsoft lost $239 billion in market capitalization this week.

In Economic News: The Consumer Price Index climbed 0.7% in the last month, that's the biggest single month gain in almost a year. Fuel prices accounted for most of the gain, but the core consumer price index rose by 0.4%, the largest jump in more than five years.

The unexpected spike in price inflation convinced the market that the Fed will definitely raise interest rates one or two more times.

However, The Wall Street Journal commented, "the acceleration in consumer prices in March could represent a peak. Already, inflationary pressures have begun to abate from a key source -- oil prices. While March's 4.9% gain in energy prices was the largest since last April, it reflected gains in crude-oil prices, which reached a peak of $34 a barrel in March. Since then, crude prices have settled back to $25 a barrel as oil-producing countries agreed to boost production."

The bellwether 30-year US Treasury bond climbed 7/32 to 106 21/32. The yield, which moves inversely to the price, dropped to 5.78%.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. We also have many of 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, as well as The Mac Observer Virtual Stock Watch portfolio.


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