The weird dichotomy created by investors being tense because the economy isnit doing poorly enough to get the Federal Reserve to drastically reduce interest rates continues today. Instead of being cheered by data that continues to come in supporting a healthier than expected economy, traders and investors instead take it as doom and gloom news. The irony seems to escape everyone. We think it safe to day that reports of the markets having reached a bottom are greatly exaggerated.
The focus on an interest rate cut has further set up investors for a disappointment. A 50 basis point (a half point) decrease has mostly been built into the markets, and not analysts want to see a 75 basis point cut. At this point, if the Fed does not move that aggressively on Tuesday, March 20th, the markets will most likely react negatively. According to a CBS Marketwatch report:
"The market is expecting a 50 basis-point-cut but is hoping itill get 75 basis points. The higher consumer sentiment number released Friday makes a bigger move less likely," remarked Peter Boockvar, equity strategist at Miller Tabak & Co.
"There was really no incremental news this week to drag prices lower, just a loss of confidence. Everyone is waiting for the Fed to bail them out [and] a 75-bais-point move would certainly boost market psychology," Boockvar said.
What this comes down to is another bad day in the markets. All three major indexes traded lower. The Dow closed well below 9,900, and the Nasdaq dipped closed just above 1,890, a new two year low. Hooray. This week marked the steepest point decline in Nasdaq history, and according to a Reuters report:
The weekis slump destroyed some $900 billion of investor wealth, and now has wiped out a whopping $4.8 trillion since March 24 last year, as measured by the closing high of the Wilshire 5000 index, which comprises most U.S. stocks.
Ouch. Today, the Triple Witching Day, and that added to the downward pressure the markets endured. Oracle and Compaq both warned after yesterdayis bell, as did Adobe. Oracle CEO laid blame for his companyis slowdown on the economy in an appearance on CNBC yesterday after the closing bell. He also pointed out that his company still earned US$900 million in profit during the quarter just reported.
Apple stood firm in the face of the selling pressure, falling by 1/8 of a point. AAPL actually traded in positive territory during the afternoon session, but a sell off in the last half hour took Apple back below yesterdayis close. The dayis range was 18 7/8 - 20 5/16, and Apple traded in moderately strong volume. The markets donit seem to care that Apple is pulling out of Sears, or that they are in the process of opening up their own line of retail stores. There has also been very little notice paid to the fact that Apple has not announced layoffs, nor have they lowered earnings guidance since their last announcements in January.
Apple closed at 19 9/16, down 1/8 (-0.63%), on moderately strong volume of 8,317,500 shares trading hands.
The Nasdaq closed at 1890.91, down 49.80 (-2.57%), on volume of 2,103,530,000 shares trading hands.
The Dow closed at 9827.64, a loss of 203.64 (-2.03%), on volume of 1,552,089,000 shares trading hands.
The S&P 500 closed at 1150.40, off by 23.16 (-1.97%).
Akamai was slammed yet again today, getting pummeled for yet another 11% loss. The stock closed at 8 7/32, a loss of 1 3/32 (-11.74%) on strong volume of 3,485,300 shares trading hands. Apple is a large shareholder of Akamai.
Adobe can best described by a title from Reuters, "Adobe shares lift on earnings, warning overlooked." ADBE closed at 28 5/8, a gain of 3 5/8 (+14.50%), on strong volume of 13,973,200 shares trading hands.
IBM dropped to close at 90.10, a loss of 5.46 (-5.71%), on strong volume of 20,037,500 shares trading hands.
Motorola closed at 14.00, another loss of 0.41 (-2.85%), on strong volume of 14,149,700 shares trading hands.
Earthlink closed higher at 10 1/2, a gain of 1/16 (+0.60%), on strong volume of 3,627,800, on strong volume of 3,627,800 shares trading hands.
Gateway closed at 14.86, a loss of a nickel (-0.05 -0.34%), on light volume of 2,347,500 shares trading hands.
Dell closed at 23 11/16, a loss of 1/2 (-2.07%), on strong volume of 42,863,100 shares trading hands.
Hewlett Packard closed at 28.10, down 2.60 (-8.47%), on strong volume of 14,082,900, on strong volume of 14,082,900 shares trading hands.
Intel closed 27 7/8, off by 5/8 (-2.19%), on strong volume of 59,121,100 shares trading hands.
Microsoft closed at 54 9/16, up 7/8 (+1.63%), on strong volume of 56,422,900 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.