Greenspan Offers Optimistic Outlook, Stocks (& Apple) Tumble

Wall Street was treated to Fed Chairman Alan Greenspanis semi-annual state-of-the-economy speech to the Congress. Mr. Greenspan offered what has been universally described as a surprisingly upbeat speech considering the precipitous way in which the Federal Reserve dropped interest rated during the past month. Mr. Greenspan walked the tightrope of giving a message that would encourage consumer confidence and quieting the expectations that there would be more cuts in interest rates. He also re-emphasized the fact that he places a high priority in playing off the national debt as soon as possible, but that he did advocate some form of tax relief.

The markets reacted fairly negatively to the news, and largely interpreted Mr. Greenspanis testimony to mean that we will not, after all, see another cut in the interest rates. Trading was sluggish throughout the day as investors sat on the sidelines. Once Mr. Greenspan started to get his mostly ambiguous message out, the trading headed south. Volume was very light across the board, and only picked up in later afternoon trading.

Apple traded in positive territory throughout the morning and early afternoon session, but dropped in the last 45 minutes of trading. The stock closed 1/8 above the dayis lows, with the dayis range from 19 to as high as 20 7/16. Volume was very light throughout the day.

Apple closed at 19 1/8, a loss of -9/16 (-2.86%) on very light volume of 4,233,400 shares trading hands.

The Nasdaq closed at 2427.72, a loss of 61.94 (-2.49%).

The Dow closed at 10903.32, down 43.45 (-0.40%).

The S&P 500 closed at 1318.66, a loss of 11.65 (-0.88%).

Akamai announced that they had sold a majority stake (60%) in their recently created subsidiary, Arriva, to a group of outside investors. The stock moved lower along with the rest of the tech sector, to close at 22 15/16, down 2 points (-8.02%) on volume of 2,094,400 shares trading hands. Apple is a large shareholder of Akamai.

Adobe closed at 37 3/16, a loss of 11/16 (-1.82%) on volume of 5,133,900 shares trading hands.

IBM closed at 113.75, a loss of 1.15 (-1.00%) on volume of 7,133,400 shares trading hands.

Motorola was the beneficiary of a new deal with China. The company will be building new wireless networks in the communist dictatorship. Motorola was one of three stocks that we track to gain in todayis trading. MOT closed at 19.75, a gain of 0.38 (+1.96%), on light volume of 11,586,000 shares trading hands.

Earthlink continues to see rumors of a Microsoft/MSN buyout, as those rumors are now being run at all the major mainstream outlets. Upside Today reports that Microsoft wonit rule out such a buyout. Despite those rumors, ELNK closed at 9 1/8, a loss of 27/32 (-8.46%) on strong volume of 3,497,100 shares trading hands.

Gateway closed at 19.65, a gain of a nickel (+0.26%) on light volume of 2,034,800 shares trading hands.

Dell was spanked by Salomon Smith Barney today as the brokerage warned that Dell would see a slower growth in their fiscal 4th quarter. Salomon analyst Richard Gardner also said that Dell was indeed laying off some 3,000 - 4,000 employees despite protestations to the contrary from Dellis management. The stock closed at 22 1/4, down a point (-4.30%) on very light volume of 22,335,100 shares trading hands.

Hewlett Packard shrugged off the downward trend to close at 33.20, a gain of 0.60 (+1.84%) on light volume of 6,733,200 shares trading hands.

Intel was downgraded by CS First Boston from a Buy to a Hold today. The stock closed at 32 7/16, a loss of 2 1/8 (-6.15%) on light volume of 41,901,700 shares trading hands.

Microsoft launched their new innovative labeled operating system, Windows XP, today. Itis about innovative concepts such as the "connected home" which bears no resemblance to the Digital Hub, of course. Wall Street was about as impressed as we were. The stock moved lower to close at 58 3/16, a loss of 9/16 (-0.96%) on light volume of 38,028,700 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.