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April 25th, 2000

[4:00 PM] Apple Stock Watch: Rally Alert! AAPL Poised For Break Out
by Wes George

The Nasdaq roared into the green for the week after a bad start yesterday. Strong across the board gains were led by a bevy of good earnings reports and the feeling on Wall Street that many market leaders suffered unduly in the wake of Microsoft's woes with the Feds. Apple's stock gained over 6% today.

Nevertheless, not every one is sure that yesterday's low of 3345 was a solid retest of the April 14th low near 3321. Market Technicians say a break out above 3830 with a strong advance to decline line is necessary to confirm a real market turn around, but that could happen as early as tomorrow.

The Mac Observer Stock Watch Virtual Portfolio climbed higher with the exception of Akamai (AKAM) which reported earnings that excluding charges for goodwill and equity related compensation, were negative $24.6 million or -$0.32 a share in the first quarter of 2000. Akamai which had its IPO in late October of 1999 is not expected to be profitable in 2000.

Apple advanced 7 13/16 or 6.46% to close at 128 5/16 on volume of 3.49 million shares. A quick look at a daily graph of AAPL shows a stock poised for a break out above the mid $130 level. Tomorrow it will be critical -- in the short term at least -- for AAPL to close above the $130 resistance level.

The Nasdaq soared 228 points (6.57%) for its second biggest point gain ever, to closed at 3711 on volume of 1.63 billion shares traded.

The Dow climbed 218 points (2.01%) to close at 11124 on volume of 1 billion shares. The Dow moved above its 200-day moving average for the first time since last October, a sure sign of more upside to come. General Electric (GE), a good proxy for the Dow as a whole, hit a new all time high today of 166 5/16.

The S&P 500 jumped 47.56 points (3.33%) to close at 1477.42.

In Apple related businesses: Akamai lost 2 13/16 to close at 73 1/16. ARM Holdings gained 4 dollars to close at 32 1/8 Adobe bounced back 15 1/4 to close at 120 dollars. Earthlink climbed 3 3/4 to close at 16 7/8. Macromedia gained 4 5/8 to 64 11/16. Motorola soared 6 15/16 to close at 111 15/16.

IBM approved an increase in the company's quarterly dividend to $0.13 and announced a stock buy back plan worth $3.5 billion to repurchase shares in the open market based on market conditions. Meanwhile IBM shareholders rejected a proposal that would have halted pension plan changes to cut employees' lifetime benefits. IBM climbed 6 1/4 to 112 3/4.

Apple's competitors: Hewlett Packard climbed 7 dollars to close at 139 5/16. Intel gained 8 7/8 to close at 125. Gateway gained 4 1/16 to close at 57 1/8. Shares of Microsoft gained 2 3/4 to 69 3/8.

Compaq gained 3 3/4 to close at 30 dollars after reporting 1st quarter earnings of $0.19 per common share in line with expectations. The company reported revenues of 9.5 billion in the for quarter. Enterprise PC revenue was at $4.7 billion for the quarter or down 4% from a year ago, commercial PC revenue was $2.9 billion or down 7%, but the consumer PC sales revenue rose to $1.8 billion or up 35%. Compaq's profit margin slipped 1.7% from a year ago.

Consumer confidence fell in April from a record 144.7 in January to 136.9 which is close to October's reading of 130.5 just before the last leg of the tech stock rally began. However, experts say that consumer confidence shows little sign of impact from the recent market weakness.

According to the Wall Street Journal, "The report showed that U.S. consumers remained confident about the future: 15.1% of those responding in April said they expect business conditions to improve in the next six months and only 5 .3% said they expected conditions to worsen. In terms of jobs, 15.8% expect there to be more work opportunities and 11.8% expected fewer jobs."

In a separate report sales of existing homes rose to a seasonally adjusted annual rate of 4.83 million units in March from 4.76 million in February.

The Economic Calendar this week is packed with market moving data releases. Tomorrow look for durable goods orders, and the retail trade numbers. Thursday is busy with jobless claims, gross domestic product, employment cost and the M2 money supply data. The GDP is expected to show that the economy is growing at 6.0%, still too fast for the Federal Reserve. And on Friday personal income and the Chicago PMI may move the market.

Wall Street will be watching all these data closer than usual for evidence that the Federal Reserve's program of interest rate hikes are beginning to take effect or for signs that inflation is accelerating.

The bellwether 30-year US Treasury bond fell a dollar to 104 8/32. The yield, which moves inversely to the price, rose to 5.94%.

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.

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.


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