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May 15th, 2000

[4:00 PM] Apple Stock Watch: Tech Stocks Rally, But Apple Tanks On Job's WWDC Keynote
by Wes George

Both the Dow and the Nasdaq experienced another nervous rally on light volume ahead of FOMC meeting which is expected to spring a half point interest rate hike tomorrow at 2:15 pm. But Apple did not participate in the rally as the market reacted to disappointing news from the WWDC regarding a delay in the OS X release date.

Steve Jobs said in his keynote address at the WWDC that OS X 1.0 won't be released till January of 2001 instead of this July as most investors had expected. OS X beta is scheduled for release this summer. The delay isn't expected to materially effect Apple's earnings per share in 2000.

While the pundits will blame today's AAPL sell off on the announcement of OS X's delayed release, at least half the decline is due to what Steve Jobs didn't announce. Many disappointed investors were hoping for a few clues from the keynote about Apple's "beyond the box" and Internet appliance plans. None materialized.

Meanwhile, Sony gave investors a few clues about its plans for handhelds in the future. A CNET News article reported, "This fall, Sony will introduce a sub-$200 PDA with color display, limited wireless Internet access, multimedia capabilities and add-on storage capabilities through its Memory Stick technology, sources say. At the same time, the company will likely announce another, lower-end device with more limited capabilities."

Apple declined 6 5/8 or 6.16% to close at 101 dollars on huge volume of over 6 million shares trading hands, twice the normal volume.

The Nasdaq climbed 78 points higher (2.22%), after falling 86 points in the morning, to closed at the day's high of 3607 on anemic volume of 1.1 billion shares making this the lightest volume day of the year. It looks like a double bottom is forming in the Nasdaq's daily chart, but we need a strong volume break out day for confirmation.

The Dow soared 198 points (1.98%) to close at 10807 on very light volume of 850 million shares. Today's Dow rally was considered more convincing by some traders than the tech advance over on the Nasdaq. Brokerage stocks and basic materials, including energy stocks, advanced strongly today.

The S&P 500 gained 31.40 points (2.21%) to close at 1452.36.

The Mac Observer Stock Watch Virtual Portfolio took a big hit on Apple's share price decline.

In Apple related businesses: Akamai bounced back 4 1/4 to close at 74 3/4. ARM Holdings gained 1 3/16 to close at 2911/16. Adobe traded higher by 1 13/16 to close at 110 dollars. Earthlink climbed 1 11/16 to close at 20 11/16. Motorola climbed 1/2 to close at 96 3/16. IBM slid 5/16 to 104 1/8.

Apple's competitors: Hewlett Packard lost 2 1/16 to close at 129 1/2. Intel gained 3 1/8 to close at 118 1/8. Gateway fell 3/8 to close at 53 dollars. Compaq climbed 3/4 to close at 27 7/8. Shares of Microsoft gained 9/16 to 69 3/8.

Industrial production, a measure of the output of US factories and utilities climbed 0.9% in April (an annual basis of 6.1%) its largest gain in over a year.

Capacity utilization, the percentage of factory's assets put to use in production, rose to 82.1% last month from 81.7% in March. Operating capacities above 84% are considered inflationary by economists, since at above that rate corporations generally begin to add capacity and try to past the cost along to customers.

The bellwether 30-year US Treasury bond climbed 18/32 ahead of tomorrow's Fed meeting to 101 7/32. The yield, which moves inversely to the price, fell to 6.16%.

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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