Earnings Warnings Send Markets, And Apple, Lower

The markets took a little trip south today after two large companies, J.P. Morgan Chase & Co. and Hewlett Packard both warned today. That set investors on edge as Wall Street has been looking for signs that the economic outlook is on the rise. According to a Reuters report:

"Iim on pins and needles," said Crit Thomas, who helps manage $215 million for National City Investment Management Co. "What people want to hear is that things have stopped going down. But theyire not going to get that. Itis just too early ... maybe in the third quarter."

Calls for consolidation in the computer industry are continuing to resonate from the echoes of Andrew Neffis pronouncements earlier this year. Reuters is reporting that Carly Fiorini, the CEO of Hewlett-Packard, is saying that HP wonit sell boxes at a loss to gain market share, and that she sees no real uptick in computer sales until Windows XP is released later this year. From the Reuters report:

"Clearly we are seeing the price wars between the 3 players you mentioned continuing and potentially even intensifying, and that is clearly having an impact," Fiorina said in response to a question about Dell, Compaq and Gateway. The PC industry has fallen on tough times, however. "Consolidation of the PC industry gets more likely as the slowdown continues," Fiorina said.

The company also announced that its May sales were slower, and that global demand was down. IDC announced yesterday that HP had taken the lead in sales to consumers during the first quarter. HP closed lower at 28.71, down 1.34 (-4.46%). In a related shocking moment of irrelevance, Circuit City has also "announced" that Windows XP will boost sales of PCs. Circuit City closed lower at 15.67, down 0.14 (-0.89%).

The semiconductor industry is set for a rebound in 2002 and 2003. The Semiconductor Industry Association, a trade group, released a forecast today that says that sales will increase by 20% next year and 25% in 2003. Intel, which will be holding an unusual mid-quarter update to investors on Thursday, moved higher by 9 cents on strong volume.

It was a year ago today that Judge Thomas Penfield Jackson ordered the breakup of Microsoft on the grounds that the company had consistently proven that it was not trustworthy. The appeal continues today and Judge Jackson has since been criticized for inappropriate behavior during the original trial. Currently, it is expected that the appeals court will not directly overturn the conviction, but will instead throw some or all of the trial back to a lower court. The Bush administrationis Justice Department is not expected to put up much of a fight, though there are no facts as of yet to back that up. One thing is certain, David Boise, the brilliant attorney who led the previous trial against Microsoft will not be involved in any retrying. Mr. Boise led Al Goreis attempt to have Floridais votes recounted during the presidential election last year and garnered few friends within the current administration. In the meanwhile, Microsoft is in the midst of restructuring their licensing model to a subscription model that benefits no one but Microsoft. This is possible only because of their monopoly power. Microsoft closed lower by 24 cents today.

Apple announced the hiring of John Brandon as vice president of the Americas and Asia Pacific, effectively replacing Mitch Mandich, who retired last year. The company has also settled with Future Power in their lawsuit to stop Future Power from marketing and selling its iMac rip-off, the E-Power.

Appleis stock moved lower today in very light volume. The stock opened lower, and stayed that way throughout the day with only slight movements in either direction. The dayis range was 20.39 - 20.93.

Apple closed at 20.73, a loss of 0.21 (-1.00%), on very light volume of 3,986,600 shares trading hands.

The Nasdaq closed at 2217.73, down 15.93 (-0.71%), on volume of 1,772,487,000 shares trading hands.

The Dow closed at 11070.24, a loss of 105.60 (-0.94%), on volume of 1,061,941,000 shares trading hands.

The S&P 500 closed at 1270.03, down 13.54 (-1.06%).

Adobe closed at 40.87, a loss of 0.81 (-1.94%), on light volume of 2,341,200 shares trading hands.

Akamai closed at 10.05, a loss of 0.08 (-0.79%), on light volume of 2,492,900 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink is apparently not a buyout target for Terra Lycos after all, through Terra Lycos will be buying specialized Web site. ELNK closed at 14.01, a loss of 0.39 (-2.71%), on light volume of 1,983,000 shares trading hands.

IBM and Hitachi have announced a new storage deal. IBM closed at 117.50, up 0.53 (+0.45%), on volume of 9,625,700 shares trading hands.

Macromedia is the subject of a critical article from Business Week regarding the companyis lack of forward guidance. MACR closed at 24.51, up 0.51 (+2.12%), on light volume of 800,600 shares trading hands.

Motorola says that Verizon will be offering its new V60c cell phone, which doubles as an FM radio. Holy Retro Technology, Batman! MOT closed at 14.80, a loss of 0.44 (-2.89%), on light volume of 7,844,300 shares trading hands.

Dell closed at 25.26, a loss of 0.96 (-3.66%), on volume of 36,012,600 shares trading hands.

Gateway closed at 16.40, a loss of 0.47 (-2.79%), on light volume of 1,755,700 shares trading hands.

Intel closed at 29.82, up 9 nine cents (+0.30%), on strong volume of 72,674,496 shares trading hands.

Microsoft closed at 72.36, a loss of 0.24 (-0.33%), on volume of 40,026,000 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.