A Cold Wind Blows on Wall Street, But Is It A Selling Climax? AAPL Stabilizes

Will the earnings warnings never end? More tech stocks missed their numbers and got taken to the wood shed by the market as the Nasdaq fell over 100 points. The over sold condition of Appleis stock canit last forever, but the bounce back hasnit started yet. Hope you own some food stocks, theyire doing great.

The word on Wall Street is watch out: The over sold condition in the tech stocks is surely a bottom building process. But as long as stocks continue to embrace every bad news item while ignoring the positive, the ride back up hasnit begun. No one wants to be first to rush into a falling market, there will be plenty of opportunity to fish for value later this month.

Appleis stock hasnit really been singled out for punishment by the stock market. Hereis a list of high technology companies that just yesterday warned theyill miss earnings. All suffered AAPLis fate today.

Marimba (MRBA), an Internet infrastructure solutions business, got crushed -49% today, after saying theyill show a loss, instead of a profit. Razorfish (RAZF), a Web design firm, nose-dived -42% on its earnings miss. Concord Communications, (CCRD) got slammed for -57%, and Veeco Instruments (VECO), a chip equipment manufacturer, sank -34%.

Apple stabilized by climbing 1/8 to close at 22 3/16 on volume of 10 million shares, the lowest volume of the week. AAPL opened at 26.5 on Monday only to fall hard. The rest of the week AAPL spent churning, building a bottom in the 22 dollar range.

A one-year chart showing Appleis stock in comparison with its peers reveals that while AAPL fared better than any other PC stock for most of the year, it is now trading down about -35%. Interestingly, things could be worst, Dell is off more than -40% and Microsoft stock is lower by about -39% in the same 52-week period. Long ailing Compaq has done the best, higher by about 12%.

Upside.com ran an article outlining the threat of declining PC sales, iAs the number of households without PCs shrink, those left become increasingly price sensitive...Price sensitivity could also deter widespread second-PC buying."

However, Forbes.com quoted Bruce Stephen, of International Data Corp., "...we still think the overall growth picture for PC sales looks healthy." IDC recently predicted sales of 33.4 million PCs worldwide, up 10% from the second quarter and a 18.5% increase year over year.

Another Upside.com opinion piece ranted, "...hoorah to the diving Apple stock. Wait itil it bottoms and buy, buy, buy. I missed the chance when Apple was at $13 then shot up to $120 and split. Nowis my new chance."

Everyone feels obligated to comment on Appleis dark moment. Robert X Cringely in latest column offered this thought,

"Panic sellers over-sell the stock. Apple is simply worth more than $4 billion. Heck, they have more than $5 billion in CASH and short term investments, making the rest of the company valued at less than nothing. The market is not stupid and will readjust. So my recommendation is to buy as soon as you can. Iim not buying any, because Iim too poor and stuck with a house I canit afford, but you go right ahead."

Finally, Steve Fortuna an analyst with Merrill Lynch was in I-told-you-so mood. He boasted to C/NET News that Appleis fall didnit "come as a surprise to us. We have not been pushing the stock. We view this to be at most one good quarter left, which is the December quarter, and then we basically said the revenue growth is going to decelerate." The last time an analyst was this bearish on Apple he lost his shirt and eventually his job.

The more the bears that come out of the woods, the closer to the bed rock bottom we are.

The Nasdaq fell 111 points (-3.20%) to close at 3361 on volume of 1.8 billion shares. The Nasdaq is down 8.5% for the week and 20% in the last 30-days

The Dow fell 128 points (-1.20%) to close at 10596 on volume of 1.1 billion shares.

The financial stocks which had been leading the Dow higher in the last month lost their touch as investors interpreted the 30-year low in unemployment to herald continued stable to higher interest rates going into 2001.

The S&P 500 dropped 27.29 points (-1.90%) to close at 1408.99.

In Apple related businesses: Akamai declined 3 1/2 to 36 3/16 for a new all time low. Itis hard to believe this was a $345 stock in January. Adobe fell 7/8 to 147 5/8. Earthlink lost 5/8 to 7 11 /16.

Motorola lost 1 3/8 to 27 1/8. Look for Motorola to report quarterly earnings next Tuesday, October 10. IBM climbed 2 9/16 to 115 3/4.

Appleis competitors: Dell gained 1/8 to 25 5/16. Gateway was lower by 2.65 to 46.48. Gateway is the first major PC vendor to report earnings next Thursday, October 12.

Compaq gave back 0.19 to 25.01. Shares of Microsoft climbed 3/16 to 55 9/16. Intel fell 1 1/16 to 39 15/16. Hewlett Packard lost 1 1/16 to 87 3/16.

In economic news: The US unemployment rate fell back to 30-year lows due to striking workers at Verizon Communications returning to work.

Low unemployment is good news, unless you are a member of the Federal Reserve worried that employers will be forced to raise wages and thus unleash a wave of inflation in the economy. However, the increasing productivity of workers seems to be counter balancing pressures for wage inflation. Average hourly earnings rose a mere 0.2% to $13.83 an hour, decelerating from Augustis 0.4% rate of growth.

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.