The Mac Observer

Skip navigational links

You're viewing an article in TMO's historic archive vault. Here, we've preserved the comments and how the site looked along with the article. Use this link to view the article on our current site:
Markets Rally on Interest Rate Optimism and Apple's Shares Gain Ground

Apple Stock Watch: - Markets Rally on Interest Rate Optimism and Apple's Shares Gain Ground

by , 5:05 PM EDT, August 7th, 2000

Tech stocks kicked into rally mode today, helped by encouraging economic data from last week. However, downgrades in the Internet and semiconductor sectors kept volume low and the gains moderate.

There is a consensus among investors that the Federal Reserve probably won't raise rates later this month, because the economy is beginning to slow, causing the recent stock market rally. The Nasdaq is up 10% since last Wednesday. Of course, a slowing economy means that earnings are peaking for many sectors, including possibly the hot semiconductor sector. Many analysts expect stocks to continue trading sideways or within their range.

Meanwhile, there is no slowing of initial public offerings (IPOs.) Last week there were 28 IPOs, four or 14% of which "broke" or closed below their opening price -- that's up from the 11% "breaking" rate for the year as a whole. Many IPOs are being delayed, including 8 from last week, while 6 IPOs scheduled for last week were pulled altogether. This week there are 37 IPOs scheduled. The high number of IPOs combined with recent outflows from mutual funds tends to provide too much supply for the demand in shares of tech stock equity.

Tomorrow Cisco (CSCO) reports earnings after the bell. The company is expected to beat earnings.

Apple climbed 9/16 or 1.19% to close at 47 15/16 on volume of 3.3 million shares.

The Nasdaq rallied 75 points (2.00%) to close just 7 points shy of the day's high at 3862 on volume of 1.3 billion shares.

The Philadelphia Semiconductor Index (.SOX) was up 3.5% today, but is still down almost 24% since July 17th. US Bancorp Piper Jaffray downgraded the whole sector citing slowing PC growth next quarter and downgraded Advanced Micro Devices (AMD) to a neutral from a buy. Piper Jaffray also anticipates a flash memory over supply and decreased sales of mobile phone handsets.

The Goldman Sach Computer Hardware Index climbed by almost 3.0%, led by Sun Microsystems (SUN).

The Dow climbed 99 points (0.92%) to close at 10867 on volume of 854 million shares.

The S&P 500 gained 16.39 points (1.12%) to close at 11479.32.

In Apple related businesses: Akamai slid 11/16 to 76 11/16 After the Motley Fool offered a bullish analysis of the stock. Adobe climbed 5 5/16 to 122 1/16.

Earthlink climbed 13/16 to 11 3/4. The Internet service provider announced it was expanding its business-grade DSL service to 10 new cities from the current four.

Motorola gained 9/16 to 36 dollars. IBM climbed 7/16 to 116 5/16.

Apple's competitors: Dell gained 1 5/16 to 42 11/16 ahead of 3Q earnings announcement later this week. Gateway was lower by 2 1/4 to 59 3/4. Intel climbed 3/8 to 62 15/16. Hewlett Packard climbed 3 9/16 to 115 5/16.

Shares of Microsoft rose 7/8 to 70 dollars. (BNBN) announced it will deliver digital downloadable books in a deal with Microsoft.

Compaq gained a dollar to 30 bucks a share. CBS Market Watch reported:

"Analyst Andrew Neff at Bear Stearns says its a "good time to buy" the stock, as the "turnaround is beginning to gel." He says the company is currently in the second phase, or stabilization phase, of its turnaround. "There are enormous gains to be had before the growth phase, or the third phase, of the turnaround." He noted that Apple Computer, IBM and Gateway were also rebounding."

In economic news: The Wall Street Journal noted that Friday's employment report, "showed a pronounced deceleration in private sector jobs, which many economists took as a sign of the long-awaited economic slowdown...While the data in the report aren't seasonally adjusted, the level of layoffs in July was 17% higher than in July 1999, the first time in 10 months that there was a year-to-year increase."

Meanwhile, this is another week of critical economic data. Perhaps, the most important is the strong 4.2% jump in Q2 productivity expected to be announced tomorrow morning, up from 2.4% in Q1. Productivity increases reduce inflation. Mr. Greenspan believes most of the recent productivity gains are sustainable. Strong productivity data gains could spur the market to rally again tomorrow.

For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference. For other stories regarding Apple's stock activity, visit our Apple Stock Watch Special Report.

Recent TMO Headlines - Updated September 25th

Sun, 12:22 PM
The Truth is in The Cloud – Mac Geek Gab 676
Fri, 7:02 PM
The Intriguing Design of The Steve Jobs Theater Explained
Fri, 5:45 PM
Anki OVERDRIVE Adds Fast & Furious Edition
Fri, 5:15 PM
iVAPO Folio Case for the 10.5-inch iPad Pro is a Delight: A Review
Fri, 5:05 PM
Terminal Tinkering: Say Hello to TMO's New Podcast for Tech Enthusiasts
Fri, 4:25 PM
Apple Posted Apple Pay How To Videos on YouTube
Fri, 3:43 PM
Movie Rentals in iTunes Have Changed for the Better
Fri, 3:00 PM
The Royal iPod Has Been Spotted For The First Time
Fri, 2:29 PM
Thanks to Misuse, Apps Can't View MAC Addresses on iOS 11
Fri, 1:28 PM
Go Behind the Scenes with Apple's iPhone Pre-order War Room
Fri, 1:20 PM
Setting Up Your New iPhone and Apple Watch, Terminal Tinkering Debut - TMO Daily Observations 2017-09-22
Fri, 11:46 AM
Blips Smartphone Lens Kits: $24.99
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!