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:
Hey, This Looks Like a Tech Stock Correction!

Apple Stock Watch: - Hey, This Looks Like a Tech Stock Correction!

by , 5:00 PM EDT, October 2nd, 2000

First official day of the 4th quarter and tech stocks got off to a rocky start as we launch into the earnings season. Apple's stock spun it wheels on ridiculous volume, digging in deeper after falling off a cliff last week.

If it makes you feel better, Microsoft's stock price has fallen to lows not seen since December 1998 and Dell is near a 2-year low today. Compaq is also in the red on a 2-year chart, but Apple's stock is still up 50% in the last 24 months.

A Bloomberg News article noted on Friday Apple's stock claimed, "the eighth-busiest day in history for a U.S. stock", by trading 132 million shares. It was also AAPL's biggest one-day decline ever, obliterating $8.5 billion of market capitalization.

Apple sank 1 1/2 to close at 24 1/4 on volume of 43 million shares. AAPL climbed a dollar first thing this morning as over eager investors rushed to get their piece of the Apple. Then the short traders went to work and volume returned to almost normal by the end of the day as buyers stepped back.

Bloomberg's David Wilson explained AAPL's collapse as the result of the "multiplier effect". Apparently, when you compare, "the one-day losses in the companies' share prices after the announcements, and the percentage difference between the new numbers and previous estimates." You find that, "the stocks' decline usually exceeded the extent of the disappointment." And so it is in Apple's case.

Lost in Friday's panic was news from the Wall Street Journal about an Apple brand store chain:

"Apple intends to open its own stores in some of the bigger U.S. cities, aiming particularly at the top five to 10 markets, according to several people who said Apple executives have briefed them on the plan over the past few months. The stores probably would carry minimal inventory and act primarily as a showcase for the Cupertino, Calif., company’s sleek computers, which likely would be shipped to customers’ homes from a central facility, they said. The project’s time frame is unclear, and Apple may still decide not to go through with it, these people said."

The Nasdaq fell 103 points (-2.83%) to close near its low of 3568 on strong volume of 1.7 billion shares. The Nasdaq is down 12% for the year-to-date.

A big sell-off in the biotech stocks ensued, in part, on worries over what the US Presidential candidates would say about genetic patents and ethics in tomorrow's debate.

The Dow started the day with an excellent rally and held most of its gains, climbing 49 points (0.46%) to close at 10700 on volume of a billion shares. Rising crude oil prices continue to pinch the Dow, but advancing issues beat declining 118 to 84.

The S&P 500 dropped 0.28 points to close at 1436.

In Apple related businesses: Akamai lost 5 3/4 to 46 7/8. A well written article by Boston Globe columnist, David Warsh, put Akamai's history in perspective. "Akamai today has around 1,000 employees; some 400 work in R&D, including 60 PhDs. It's more like the old Bell Labs than anything else. The organization that shares resources and moves traffic around the Internet is partnered with 225 different networks - a smidgen of the whole (there are 7,000 internet service providers) but an order of magnitude more than anyone else."

Adobe soared 7 3/4 to 163 dollars. The company is on a roll, they added 27 cool new effects plug-in to their animation software, After Effects, and scored a new 52-week high. A Prudential Securities alert said that Apple's weak quarter, "should not have any impact on Adobe." But warned, "Because 37% of Adobe's revenues are from products built on the Mac platform there might be some knee jerk selling. We would buy the stock on any weakness."

Earthlink fell 5/8 to 8 5/8, a new 52-week low. Motorola shed 13/16 to 28 1/8. IBM bounced 5 3/16 to 117 13/16.

Apple's competitors: Dell lost 1 9/16 to 29 1/4, a new 52-week low. Gateway was higher by 0.52 to 48.77. Compaq gained 0.49 to 28.29. Shares of Microsoft lost 1 3/16 to 59 1/8. Intel fell 1 7/16 to 40 1/8. Hewlett Packard lost 3 3/16 to 93 13/16.

The Mac Observer Stock Watch Virtual Portfolio is at its low for the year.

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 February 28th

Mon, 6:28 PM
iOS: Long Press Icons For Safari Shortcuts
Mon, 5:49 PM
Apple, Ron Johnson, J.C. Penney and the Future
Mon, 5:11 PM
Apple gets the Upper Hand on Qualcomm Thanks to Intel's CDMA Chips
Mon, 3:53 PM
TMO Background Mode: Interview with CNET Senior Editor & TV Reviewer David Katzmaier
Mon, 2:08 PM
Why Apple Might Discontinue the Mac Pro - TMO Daily Observations 2017-02-27
Mon, 12:06 PM
FRESHeBUDS Air Bluetooth 4.1 Earbuds
Mon, 11:34 AM
New Drone Footage Shows Nearly Complete Apple Park
Mon, 11:10 AM
AT&T Revamps Unlimited Data Plans with Tethering, Lower Prices
Sun, 10:47 AM
How do I choose a UPS? – Mac Geek Gab 646
Sun, 1:15 AM
Get Free Bitcoins from 11 Faucets That (Still) Pay
Sat, 9:42 PM
How to Turn Siri into a Metronome (Video)
Fri, 10:17 PM
Stanford's 'Developing iOS 10 Apps with Swift' free on iTunes U
  • __________
  • Buy Stuff, Support TMO!
  • Podcast: Mac Geek Gab
  • Podcast: Apple Weekly Report
  • TMO on Twitter!