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December 12th 1999

[4:20 PM] Apple Stock Watch: A Volatile Week Ends Higher, but not for Apple
by Wes George

The tech stocks rested today as the rally broaden out to include the financial stocks and many of the blue chips. The highly speculative IPO market continued to be the hottest place on Wall Street as FreeMarkets Inc. (FMKT) soared 243 dollars in late trading.

Apple continued to sell-off for a third day, down 2 1/4 to close at 103. Today's unusually large trading range for AAPL spread from a high of 109 1/4 to a low of 99. Apple is down more than 14 points this week.

This afternoon Salomon Smith Barney reiterated their outperform rating and target price of $115 on Apple, saying that the margin pressures felt by the low-end PC market shouldn't effect Apple's, Dell's or Gateway's bottom-lines, because they don't have products in the sub-$600 range.

Apple stock rose off its lows on this opinion illustrating the volatile, news driven nature of prices this week, and that investors are down on the PC sector because IDC predicted the PC sales growth rate to pullback to 17% per annum next year.

The Dow rallied 89 points (0.81%) to close at 11224 with a volume of 974 million shares. The transportation average was up over 2.0% as oil prices sagged on news that the UN is renewing its food for oil deal with Iraq.

The Nasdaq gained 26 points to close at 3620 with 1.5 billion shares traded for the 51st record high of the year and a 2.6% gain for the week. Internet stocks were up and the semiconductors were down.

The S&P 500 lost 8.93 points (0.63%) to close at 1417.04.

The bellwether 30-year Treasury bond gained 23/32 to close at 99 14/32, while the yield dropped to 6.16% from 6.21% on Thursday.

The producer price index rose 0.2% after a 0.1% decline in October. The core PPI which excludes energy and food prices was flat in November. Analysts were expecting a slight gain. Overall the numbers confirm that inflation continues at a mild pace, but many are concerned that higher energy costs may eventually fuel inflation in other sectors of the economy.

Wholesale prices have advanced at 2.9% this year compared to no increase in 1998. A 2.9% rate of inflation is mild by historical standards, especially with energy prices rising. Crude oil prices are up 160% year to date.

In Apple related businesses Adobe gave back 2 7/8 to end at 62 5/8 . Macromedia gained 4 1/2 to close at 86 7/8 . Symantec was down 1 5/8 to close at 58 5/16.

Apple's Power PC partners, IBM and Motorola, went separate directions. IBM continued to sell off after the company told analysts yesterday that profits would be down $0.15 to $0.20 from last year at this time, and aren't likely to rebound for at least another quarter. IBM ended down 4 7/16 to close at 108 15/16.

Motorola gain 1 1/16 to close at 131.

Apple's competitors ended the day mixed, Gateway rose off its recent lows, up 1 1/8 to close at 68 5/8. Dell and Intel continued to downtrend. Hewlett Packard lost 1 1/2 to close at 109.

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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