Apple Sheds 3% As Earnings Warnings Drive Down Stocks [Updated]

The warning from Palm that we reported yesterday had the expected effect on the markets today, but it was helped out significantly by yet another warning from Nortel. This is the 2nd warning from Nortel in as many months for the same quarter, and that renewed the waves of pessimism that have been washing over Wall Street since late January. The result was another wave of selling in both the Dow and the Nasdaq, with Tech stocks taking it on the chin, including Apple.

The markets had been in rally mode this week, especially the Dow which had posted a more than 500 point gain since last Friday. The Nasdaq too had regained some ground, but today the index gave back all but some 23 points of those gains to close almost 6% lower. There were attempts to rally during the afternoon, and indeed, the Dow bounced off the days lows, but the Nasdaq closed just two points off of its own lows. Volume for both indexes was moderately strong.

Apple continues to get press coverage for Mac OS X, but has largely been overshadowed by the hype machine for Windows XP. Speaking of Microsoft, Salon published a punishing column on the farce known as HailStorm. Salon, never afraid to point out that the emperor is naked, gets a pat on the back for this one. Of interest is a column from Charles Haddad of Newsweek who suggests that Apple is about to roll out a new education effort. Mr. Haddad looks at a number of recent events which led him to this belief, and we think it is a sound analysis. If so, Apple could be looking at a renewed presence in the education market which should add significantly to their bottom line.

Also interesting, from a trivia standpoint, is that Floyd Kvamme, one of the VCs who helped launch Apple in the mid-70is, was named by President Bush to chair the Presidentis Committee of Advisers on Science and Technology.

Apple opened up a full point lower, and only managed to recover a small portion of that down-tick as the stock traded in strong volume. The stock traded in a fairly narrow range of 21.5 - 22.5.

Apple closed at 22.17, a loss of 0.70 (-3.06%), on strong volume of 10,450,500 shares trading hands.

The Nasdaq closed at 1854.13, a steep loss of 118.13 (-5.99%), on volume of 2,072,975,000 shares trading hands.

The Dow closed at 9785.35, a loss of 162.19 (-1.63%), on volume of 1,306,096,000 shares trading hands.

The S&P 500 closed 1153.29, down 28.88 (-2.44%).

Akamai announced a new deal with Softbank for content streaming in the Asian market, but Wall Street was unimpressed. AKAM closed at 8 7/32, a loss of 25/32 (-8.68%), on light volume of 1,925,600 shares trading hands. Apple is a large shareholder of Akamai.

Adobe attempted to capitalize on hype from the Academy Awards by announcing that their product were used in the creation of Gladiator. Again, Wall Street was unimpressed. ADBE closed at 33.97, a loss of 2.63 (-7.19%), on moderately strong volume of 6,237,100 shares trading hands.

IBM lost all of yesterdayis gains, and them some, to close at 94.41, down 5.09 (-5.12%), on strong volume of 11,890,900 shares trading hands.

Motorola dropped again today to close at 14.98, a loss of 0.98 (-6.14%), on light volume of 8,444,800 shares trading hands.

Earthlink finally saw some profit taking today after a multi-week run, to close at 10 7/8, a loss of 9/16 (-4.92%), on light volume of 1,593,700 shares trading hands.

Gateway closed at 16.53, off by 0.47 (-2.76%), on light volume of 1,592,200 shares trading hands.

Dell closed at 26 7/16, a loss of 9/16 (-2.08%), on volume of 43,238,400 shares trading hands.

Intel closed at 26 15/16, a sharp loss of 2 7/16 (-8.30%), on strong volume of 72,974,304 shares trading hands.

Microsoft closed at 55 9/16, down 2 11/16 (-4.61%), on volume of 39,351,200 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.