AAPL Gets the Blahs in a Stagnant Stock Market

The tech stocks perked up this morning as investors anticipated a stellar earnings announcement from Oracle and benign economic reports showed no sign of inflation, but many stocks couldnit hold the dayis gains. Appleis stock lost over a dollar in a late afternoon sell-off.

Andreas Pfeiffer sees a big future for Mac OS X. He commented: "So what will happen if Apple has a runaway success with Mac OS X? Simple: Apple will once again be back in the role not only of the leader in looks but also in functionality, the first company to deliver a mass-market, consumer-oriented OS with a modern technology base, easily a year or more before Microsoft will be able to ship Whistler, the replacement for both Windows ME and Windows 2000. Mac OS X is probably the first mass-market operating system since Windows 95 that introduces major innovations in the user interface."

Apple sank 1 9/64 or 1.97% to close at 56 55/64 with 7.6 million shares trading, almost twice the normal volume.

From all reports it appears that Steve Jobis keynote at Apple Expo 2000 in Paris went well, in spite of a flood, and crowded buses. However, there are some differences between European and American audiences. Macworld reported, "This e-commerce thing apparently isnit catching on in Europe. When Jobs mentioned that the key lime iBook was only available through the Apple Store, the crowd hissed and whistled, clearly taking Appleis CEO aback. "Itis maybe the best online store in the world," Jobs said -- a claim heid have to repeat a half-hour later when the crowd hissed the news that the OS X beta was only available online as well."

The Nasdaq gained 19 points (0.51%), after soaring over 90 points earlier, to close at 3913 on volume of 1.6 billion shares.

Raymond Block, an influential technical analyst, cautioned on CNBC that the Nasdaq could retest Mayis lows, in part, because of the weakness in tech leaders such as Cisco, Microsoft and Dell.

The Dow fell 94 points (-0.85%) to close at 11087 on volume of 1 billion shares. The weak euro is taking its toll on quarterly earnings for big US corporations with European exposure. High energy prices are damaging earnings for many types of manufacturers. Together, the falling euro and rising fuel costs are keeping a lid on the NYSE, much as fear of the Feds raising interest rates did in the first half of the year.

The S&P 500 dropped 4.04 points (-0.27%) to close at 1480.87.

In Apple related businesses: Akamai climbed 5/8 to 63 15/16. A Red Herring article called Akamai "king of content delivery", noting the data streaming service has 90% of the Internet content delivery market. Earthlink gained 9/16 to 11 3/8.

Adobe has probably announced third-quarter earnings by the time you read this. Analysts expect the company to earn $0.53 a share in the third quarter compared with $0.40 a share a year ago. Adobe fell 9/16 to 125 3/8.

Morgan Stanley Dean Witter analyst Charles Phillips lifted his rating on Oracle to istrong buyi from ioutperformi ahead of the earnings announcement. This afternoon Oracle reported earnings of $0.17 per share, up from $0.08 last year at this time and soundly beating expectations of $0.13 per share. Oracle climbed 3 1/8 to 84 15/16.

The press release headline read, "IBM Breaks From the Pack with New NetVista Desktop PCs. New models deliver edge-of the-network capabilities complete product transition to sleek-designed, easy-to-use systems." Sounds like IBM is attempting a belated convergence with the iMacis design. IBM climbed 1/4 to 127 7/8.

Appleis competitors: Gateway was higher by 2.02 at 60.72. Compaq gained 1 3/8 to 31 1/8. Intel fell 1 5/8 to 59 5/8. Hewlett Packard gained 1 1/4 to 106 1/4.

Dell, in a move perhaps intended to counter the Mac OS X hoopla, announced today that it is shipping some laptops with the Windows Millennium Edition (Windows Me). The PC vendor hailed the Me system as "delivering advantages" over Windows 98. Dell gained 3/8 to 36 5/8.

Microsoft got hit with a downgrade, while in an unrelated incident Paul Maritz, vice president of platform development at Microsoft, "retired" at age 45. Maritz isnit the first Microsoft executive to bail in recent months. "Other notable departures include former chief financial officer Greg Maffei, former research chief Nathan Myhrvold and longtime Windows chief Brad Silverberg," said an Associate Press report. Shares of Microsoft dived 2 7/16 to 65 13/16.

In economic news: The producer-price index, a measure of inflation at the wholesale level, fell 0.2% in August for the first decline in four months. According to the Wall Street Journal, "The survey was made before the recent jump in oil prices and was partially affected by crop surpluses. But the PPI rose just 0.1% when food and energy costs are excluded -- an indication that productivity is rising fast enough to offset the inflationary hazard posed by strong growth and tight labor markets."

Meanwhile, other reports confirmed the lack of inflation in the economy. The weekly jobless claims hit an 18-month high and retail sales crept up by only 0.2%.

Watch for the consumer price index on Friday, along with industrial production and capacity utilization data.

The yield curve on the 30-year bond is no longer "inverted" with the 10-year note for the first time since January.

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.