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June 16th, 2000

[4:00 PM] Apple Stock Watch: The Dow Tanks, Apple Drops
by Wes George

It was all about the Old Economy Friday and that economy is definitely slowing. Tech stocks fared well considering the how poorly the day went for the Dow. An upgrade for Rambus buoyed tech concerns while interest rate worries pressed the Old Economy banking stocks on the Dow lower. AAPL sold off in the morning and couldn't sustain a come back.

Traders on Wall Street had hoped stock and index option buying would boost the markets today. Meanwhile, further encouraging signs of an economic slow down ahead promises to bring an end to the cycle of ever higher interest rates.

Rambus (RMBS) soared over 26 dollars to close at 80.25 on the news that Toshiba had agreed to pay a licensing fee and royalties for the company's patents to use in standard memory and double data rate (DDR) production. Rambus had sued Toshiba for patent violations in the past. Toshiba's concession lends credence to Rambus's claim that most of the memory industry owes it royalties.

Housing starts fell 3.9% to their lowest level in a year as the higher mortgage rates pinch the market. According to the Wall Street Journal, "Some economists have also noted that volatility in the stock market has contributed to some of the slowing by making people feel a little less in the buying mood."

We are starting to enter earnings announcement season. The first few weeks could be critical in setting a theme for the summer in this directionless market. Fortunately, Oracle (ORCL) is the next major tech stock to report next Tuesday.

The pivotal date for the stock markets this month is June 28th when the Federal Open Market Committee (FOMC) will announce their decision on whether to raise interest rates for a seventh time in one year or assume a wait-and-see posture.

Apple lost 1 3/16 or -1.29% to close at 91 3/16 on volume of 2.7 million shares. It has been a tough week, AAPL has tested support three times in five days but can't seem to rally higher. It certainly appears that AAPL wants to test the lows of May once more before making a base. However, this close to the MacWorld Expo in July it would be uncharacteristic of AAPL not to rally.

The Nasdaq climbed 14.86 points (0.39%) to closed at 3860 on volume of 1.4 billion shares. The Nasdaq was off 0.4% for the week.

The Dow fell 265 points (-2.48%) to close at 10449 on volume of 1.2 million shares. Drug stocks were up but the big banking stocks were on the skids due to worries about second quarter earnings due to the latest interest rate increases. The Dow lost 1.6% for the week.

The S&P 500 dropped 14.51 points (-0.98%) to close at 1464.22. S&P beat the trend rising 0.5% this week.

The Mac Observer Stock Watch Virtual Portfolio had a tough day.

In Apple related businesses: Akamai lost 3 1/4 to close at 88 dollars. ARM Holdings gained 1 9/16 to close at 31 13/16. Earthlink fell 1/2 to close at 16 1/16. Motorola lost 1/4 to close at 34 1/8. IBM shed 2 11/16 to 114 1/8.

Adobe fell 4 1/2 to close at 120 1/4 in spite of the company's strong second quarter earnings of $0.51 per share, $0.03 better than analyst expected and revenues rose 22% over last year to $300.1 million. However the company did forecast a cap on how fast its new professional publishing software can expand into the market.

Apple's competitors: Hewlett Packard lost 2 1/4 to close at 114 3/4. Gateway was up 3 3/16 to close at 57 3/4. Compaq fell 5/16 to close at 27 7/16. Intel fell 2 3/16 to 126 1/16.

Shares of Microsoft were up 3/16 to 72 9/16. In spite of MSFT's fall from grace on Wall Street, Bill Gates is still the world's richest man according to Forbes article.

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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