AAPL Gets Kicked Lower on Unfounded Fears

Intel warned it would miss earnings due to weak sales in Europe. Then a coalition of central banks began buying euros because of concerns over the "implications of recent movements in the euro exchange rate for the world economy." The markets were worried a falling euro would hurt tech earnings and Intelis miss confirmed their anxiety. Apple investors capitulated in a second day of high volume trading on fears that Cupertinois earning might be weak as well.

For the first time in the eurois short existence the central banks of Japan, England, the US, Canada and the European Union intervened in currency markets to support the euro, which climbed several cents against the dollar. On Wednesday, the euro sank to all-time lows of 84.38 cents and 90.04 yen. The surprise concerted intervention came just one day ahead of an important G-7 meeting.

After the markets closed Energy secretary Richardson announced that President Clinton had decided to release oil from the strategic oil reserves. Earlier, crude oil prices fell a dollar in anticipation of the move.

Apple sank 4 1/2 or 7.94% to close at 52 3/16 on remarkable volume of 12 million shares as investors imagined Intelis woes were Appleis. On Thursday, AAPL fell 4 23/64 to close at 56 11/16 on volume of 8.8 million shares. The stock is in an unusually oversold condition, down 15% in two days.

Salomon Smith Barney analyst Richard Gardner said in a research report that Appleis weakness reflected fears that sales of some of its older products had been weaker than expected this summer. But he didnit change his revenue forecast of $2.05 billion for the 4th quarter. Yesterday, a research note from Morgan Stanley Dean Witter raised concerns that Appleis 4th quarter sales could be depressed by new product rollouts. CBS MarketWatch said, "Salomon also pointed out that Apple has the strongest product line-up in its history as the market moves into the peak holiday season."

The CBS MarketWatch article went on to quote Daniel Kunstler, analyst with J.P. Morgan in San Francisco, "Intelis indicating that thereis really weak end-user demand that will spill into the fourth quarter. But thereis no hard evidence of that happening elsewhere. Actually, thereis some evidence to the contrary. The sky is not falling in Europe."

According to Reuters, "Bear Stearns analyst Andy Neff said in a research report that Apple remained one of his favorite stocks, noting it should get momentum from forthcoming new products like the Mac OS X operating system."

The Nasdaq fell 25 points (-0.66%) to close at 3803 on extreme volume of 2.15 billion shares. However, since the market opened about 214 points down to bounce off Julyis lows in what technicians considered a successful retest of support, the day ended very well. Todayis volume was the highest since June 30th.

The Dow climbed 81 points (0.76%) to close at the dayis high of 10847 on high volume of 1.17 billion shares. Much of the billions of dollars flowing out of Intel followed into beaten down old economy stocks.

The S&P 500 dropped 0.34 points (-0.02%) to close at 1448.71.

In Apple related businesses: Akamai slipped 2 3/8 to 52 3/16, a new all time low for the ten-month old equity. Adobe fell 7 7/16 to 149 9/16, but still gained about 15 dollars this week. Earthlink gained 3/8 to 10 3/8. IBM climbed 2 9/16 to 124 1/16.

Appleis competitors: Dell lost 2 buck to 35 15/16. Compaq gained 1 3/4 to 29 5/8. Shares of Microsoft dived 15/16 to 63 1/4.

Intel fell 13 35/64 or 22% to 47 15/16 on the largest single day volume ever for a single stock on the Nasdaq of 308 million shares trading. A slew of analysts rushed to downgrade and lower estimates on Intel and the whole chip sector after Intelis surprise earnings warning. Other tech giants rushed to announce they donit have Intelis problems.

HP announced a billion dollar stock buyback plan and named Carly Fiorina, the companyis CEO and president as chairman of the board. Itis the first time a woman has ever held all three positions simultaneously in a Fortune 500 company. HP also said, in view of Intelis problems, that they are comfortable with their earnings estimates. Hewlett Packard soared 9 1/4 to 104 1/4.

Gateway CFO John Todd said that the company is on track to hit consensus earnings of $0.41 for the quarter. He also said the company would open 100 new Gateway stores each year and 250 stores-within-a-store every quarter for the "foreseeable future." Gateway was higher by 4.50 to 55.50

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 Appleis stock activity, visit our Apple Stock Watch Special Report.