Apple Denies Palm Takeover, AAPL Moves Higher

The markets stayed in the doldrums for most of the day, but a late afternoon rally helped pull many techs into positive territory. As a whole, the Nasdaq turned a 65 point deficit into a 89 cent loss, while the Dow closed higher by 29 points. Volume for the major indexes continues to be light, though stronger today than in the last three trading session, as investors remain worried about corporate profits. From a Reuters report:

Research firm Thomson Financial said 459 of the 707 pre-announcements made so far have been warnings. About 100 warnings alone are expected from chip-related companies, of which about half have come in.

We find it interesting that Microsoft is continuing to get bad press for its aggressive moves in the market place. More commentators are suggesting that the company is confident that itis breakup will be overturned as it make more moves to leverage Windowsi monopoly power into other markets. An editorial at Salon sounds off on the topic, and ZDNet is reporting on Microsoftis attempt to manhandle its customers into using WMA instead of MP3.

Hey, how about a new Apple-is-going-to-buy-Palm rumor? This time Wall Street is the culprit as rumors of a buyout of Palm by either IBM or Apple swept The Street. Palm has been hammered by slacking demand, a poor reception to its latest product rollout, and a slowing economy. The company was once pursued by Steve Jobs for Apple, but 3-COM passed on the offer at the time. With the decline in Palmis stock price, the company has become a much more attractive takeover target. According to Reuters report:

"No one has approached me and I have no comment consequently," Yankowski told Reuters.

Although Palm dominates the global market for personal digital assistants, or PDAs, the sales slump has led to rumors regarding potential suitors with experience in selling gadgets and software, such as International Business Machines Corp. and Apple Computer Inc.

An Apple representatives said the company does not comment on rumors. An IBM spokesman was not immediately available to comment.

Palm moved higher on the rumors, closing at 5.94, up 0.11 (+1.89%).

Representing the Dark Side, Dell computer announced that despite the companyis price war with Gateway and Compaq, it saw no growth in sales until the 4th quarter of this year. Kevin Rollins, the same VP that announced there was little hope for Apple earlier this year, said:

"At this point in Q2 we donit see any major uptick, and donit believe, frankly, weill see it in Q3," Chief Operating Officer Kevin Rollins said in a presentation at a technology conference. "Q4 is the first opportunity that we see for some improvement in both the macroeconomic environment and the IT purchasing market," he added, referring to corporate buying of computer systems.

"If you go back to i99, in Q2 you see a 29 percent unit growth rate -- the high in preparation for Y2K," he said, referring to the high demand of computers ahead of the Year 200 date changeover. "So our anticipation is that replacement cycle, while not being as large is in i99...will start, and most likely drive the overall unit volume in Q4, and Q1, Q2 through next year," he said.

Dellis declared price war was met with a matching offer from Gateway in late May. Analysts have met the price war with some apathy, but both Dell and Gateway have been claiming increases in market share. In the first quarter, Hewlett-Packard was declared the new consumer market share leader and has vowed not to sell computers at a loss in order to gain market share.

Meanwhile, Apple has been silent on the issue. The company has not issued any guidance since its Q2 press conference in April, but has instead focused on new products. Appleis stock moved higher today, though whether in reaction to the Palm rumors or the Wintel worldis woes is not clear. The stock opened up lower, and stayed with the markets throughout the afternoon. In the last to hours, AAPL jumped into positive territory and crested at some 60 cents in the black, only to shed half of that in the final half hour. Volume was light, and the dayis range was 19.76 - 20.69.

Apple closed at 20.31, a gain of 0.27 (+1.35%), on light volume of 5,425,100 shares trading hands.

The Nasdaq closed at 2169.95, a loss of 0.83 (-0.04%), on volume of 1,715,523,000 shares trading hands.

The Dow closed at 10948.38, up 26.29 (+0.24%), on volume of 1,136,985,000 shares trading hands.

The S&P 500 closed at 1255.85, a gain of 1.46 (+0.12%).

Adobe closed at 41.18, a loss of 1.11 (-2.62%), on light volume of 4,002,000 shares trading hands.

Akamai closed at 9.15, a gain of 3 cents (+0.33%), on light volume of 2,326,800 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 14.16, up 0.14 (+1.00%), on very light volume of 724,700 shares trading hands.

IBM closed at 117.25, down 11 cents (-0.09%), on light volume of 7,301,500 shares trading hands.

Macromedia closed at 23.75, up a buck (+4.40%), on very light volume of 424,200 shares trading hands.

Motorola announced two new processors for PDAs, including their processor based on ARM technology the company licensed earlier this year. MOT closed at 14.00, down 0.86 (-5.79%), on strong volume of 16,838,500 shares trading hands.

Dell closed at 26.10, up 0.84 (+3.33%), on light volume of 33,892,700 shares trading hands.

Gateway closed at 16.45, up 0.22 (+1.36%), on very light volume of 712,500 shares trading hands.

Intel closed at 30.13, down 0.20 (-0.66%), on strong volume of 54,092,400 shares trading hands.

Microsoft closed at 72.08, down 4 cents (-0.06%), on light volume of 33,358,000 shares trading hands.

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 updated Apple Stock Watch Special Report. You can also check out our Apple Financial Boards, a new moderated forum for Apple Investors and people who are interested in Appleis financial dealings.