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December 3rd 1999

[4:25 PM] Apple Stock Watch: The Mega-Rally Continues, Apple Climbs To Another New High on Price Target Upgrade
by Wes George

Tame November employment numbers spawned an orgy of optimism in the stock market. Buying was wild on the Nasdaq which soared a hundred points early in the day, giving back some later to close with a respectable gain of 67 points.

Apple traded higher by 4 13/16 or 4.37% to close at 115 on slightly above average volume. Apple started the week at about 95 a share for a 20 point gain this week.

Bear Stearns raised its 12-month price target on Apple to the $115 -$120 range from $90-$95. They said, "We view Apple's near-term outlook with increasing confidence following conversations with management as it appears the quarter is on track and there may be upside in the revenue numbers due to better-than-expected consumer sales going into the Christmas season." They also said to look for an "... incremental upside from an Internet strategy expected to be unveiled in the next few months."

Bear Stearns maintained a buy rating on AAPL, reiterating their earnings estimate of $3.20 a share for fiscal 2000 and $3.45 a share for 2001.

The Dow bulled ahead 247 point (2.24%) to close at 11286, just 40 points shy of an all time high, on a volume of 981 million shares traded. The banks stocks were strong and so was everybody else.

The Nasdaq gained another 67.84 points (1.97%) after yesterday's 99 point gain to end the session at 3520. Volume was the fifth heaviest day on record with 1.5 billion shares traded.

Today's surge pushed the Nasdaq to a 61% year to date gain, or a 5.5% rally for the week. The best one year gain ever for the Nasdaq was 56.8% set in 1991. The telecom stocks led the way higher, but most sectors showed positive strength today.

Technology stocks have been the place to be this year. For instance, software stocks, as a whole, are up 122% this year so far. Hardware stocks are up 57%, note that Apple is an exception to this rule, up about 175% for the year. Internet stocks are up 103%. Networks have soared 94.3%, and the semiconductor sector is up 86.7%.

The S&P 500 rose 24.01 points (1.70%) to close at 1433.05 for a new all time high.

30-year Treasury bond rose 24/32 in a relief rally to close at 98 4/32, the yield dropped to 6.26% from 6.32% yesterday.

November's employment number came in slightly weaker than some expected, remaining unchanged from last month at 4.1%. Average hourly wages only increased $0.01 to $13.41 per hour, while the manufacturing sectors continued to shed workers at the rate of 2,000 lost last month, down from 9,000 jobs lost per month earlier in the year.

Overall, 234,000 new jobs were created for November. 120,000 in the service sector and 55,000 in construction, double October construction job numbers. The surge was attributed to unseasonably warm weather.

Although inflation is basically a monetary phenomena, the Fed looks to these employment numbers to gauge inflation, which for now appears to be temporarily contained. Today's numbers show strong economic growth with no labor-based inflation pressures. The price of gold, a more reliable indicator of inflation, has been slipping lately.

Virtually no one feels that the Fed will raise rates during their last meeting this year on December 21st.

Clinton took advantage of the closing day of the WTO's devisive meeting in Seattle to point out that 20 million new jobs were created in the US since he took office.

In Apple related businesses, Akamai saw some profit taking down 8 1/4 to close at 207. Adobe lost 1 15/16 to end at 66 11/16. Macromedia soared 9 1/8 to close at 76 5.8. Symantec was up 1 5/16 after yesterday's amazing 5 9/16 point gain to close at 51 1/16.

Apple's Power PC partners were both up , IBM blasted up 6 47/64 to close at 112, while Motorola gained 5 7/16 to end at 124.

Apple's competitors, Compaq and Dell, barely gained a fraction today, while Hewlett Packard climbed over 7 points to 107.

Gateway was the only red in a sea of green down 3 13/16 after selling off 6 points in the last three days, to close at 73. GTW's stock suffered a delayed opening today due to an order imbalance to the sell side. According to the strong morning down draft was due to rumors that Ted Waitt, Gateway's founder is stepping down as CEO. Gateway had no comment.

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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