The market offered little to investors on Thursday. The major indexes moved lower overall, in what can be described best as choppy trading as buyers and sellers reacted to a mixed bag of economic reports, corporate warnings and analyst recommendations. Prices moved up and down in halting steps as conflicting news hit the Street and traders watched for elusive signs of economic recovery, and for previews of corporate results that might signal the strength of third quarter earnings. After several days of roller coaster style movements in the market, Thursdayis trading revealed that no matter the ups and downs of recent sessions, the market is still moving to new multi-year lows in the absence of solid earnings growth and consistent indicators that the economy has settled on solid ground.
On Thursday the Dow Jones Industrial Average ended at 7,717.19, down 38.42. The S&P 500 Index was off 8.96 at 818.95. The NASDAQ Composite Index fell 21.74 to finish at 1,165.56. On Thursday Apple moved higher by US$.13 to close at US$14.30.
Advanced Micro Devices, Intelis competitor in the desktop microchip market, lost about one-third of its value after announcing that third quarter revenue would be below market expectations. The company cited weak sales of PCs for its disappointing performance. AMD closed down US$1.74 at US$3.63.
Apple chipmaker Motorola closed up US$.31 at US$10.46 after JP Morgan upgraded the stock from a neutral position. JP Morganis analyst is expecting strong results from Motorolais wireless products and services and an improvement in the performance of MOTis semiconductor unit.
Steve Jobs Resigns From The Board of Gap, Inc.
Apple cofounder and CEO Steve Jobs has resigned from the Board of Directors of Gap, Inc. (See TMOis full coverage for more information.) The move follows the retirement last week of Mickey Drexler as the companyis CEO. Mr. Drexler has also served as a director of Apple since 1999, and many credit him with being the catalyst for the development of Appleis new retail stores.
The brokerage arm of Bank of America has initiated coverage on Apple Computer with an inaugural rating of "market perform." Prior to the recent restructuring of Bank of Americais brokerage and securities unit, the firm had a long-standing history of supporting an optimist view of Apple and its performance in the PC market. The number of analysts that publicly offer recommendations on a particular stock impacts the number of institutions and individual investors who take an interest in the company.
Earlier this week, Apple announced that the number of .Mac service subscribers has topped 180,000. Apple has extended the iTools to .Mac conversion deadline by two weeks to October 14, 2002. iTools subscribers who convert their accounts to a .Mac subscription receive a discount on their first year fee of US$49.95. The annual cost of a .Mac subscription for new members is US$99.95.
Microsoft and Apple announced a discount on the purchase of Microsoft Office for OS X when purchased with a new Macintosh. The discount program runs until January 7, 2003 and discounts the price of Microsoft Office for OS X to US$199, a US$300 discount.
Last summer Microsoft complained quite bitterly that sales of Office for OS X werenit meeting expectations. With a retail price of about US$499.00, the product suite becomes a very costly investment. PC manufacturers have long been able to offer a discount on Microsoft Office to purchasers of new Windows-based PCs. However, until now Mac users have not been able to take advantage of similar discounts. While the bundled price of US$199.00 is still US$50 higher than Office bundles offered by many PC makers, the promotion marks a dramatic change in the promotion and pricing strategy for Microsoftis OS X version of its productivity suite.
Late on Thursday Gateway announced the company is changing advertising agencies after less than a year with its most recent firm. The Gateway account is estimated at about US$180 million per year in advertising-related spending and the change in agencies has caught some by surprise. Gateway has recently become much more colorful in its advertising campaigns, such as featuring the companyis founder and CEO driving a truck while singing along with a Holstein cow. Most recently Gateway has filled the airwaves and cable lines with ads comparing its new all-in-one computer to the popular Apple iMac and comparing its other desktop offerings on price and features to products sold by rival Dell Computer. One would normally assume that a change in Gatewayis ad agency would be due to dissatisfaction with consumer response to the ads currently on the air.
Earlier this week The Mac Observer offered readers an analysis comparing and contrasting Gateway and Apple Computer.
Carly Fiorina, HPis CEO, publicly stated on Thursday that she sees a soft recovery in sales in 2003. In the comments from the chief executive of the worldis largest PC maker, she took aim at Dell Computer for its strategy of gaining market share in a shrinking PC market versus HPis strategy to achieve growth by expanding its line of products and services.