Markets Extend Rally, But Apple Drops 55 Cents

Letis leap right to Dell. The company turned in results after the bell today that basically met reduced expectations. The companyis sales rose by some 21% in the US, but their profits were relatively flat. The company earned US$462 million, or 17 cents per share, compared to US$466 million in the year ago quarter, also 17 cents a share. The company has been waging a price war that has allowed it to gain market share in the midst of slowing PC sales. This has taken a toll on their profits and margins:

"If things had been bad on the margin side they would have had to become less aggressive in the price war they are driving in the industry," said Meta Group analyst Steve Kleynhans. "Theyive laid off a bunch of people and consolidated operations. That says they may be able to continue this price war through the summer," he added.

The company lowered guidance for their 2nd fiscal quarter (Q1 ended on May 4th). The company expects to earn from 15 to 17 cents for the quarter, and said that revenue would decrease from 3% to 5% from the 1st quarter. CBS Marketwatch has a very good report on Dellis press conference and earnings report. Dell closed higher today in advance of their earnings report, but moved lower in after-hours trading. It is unclear if investors will focus more on the current good quarter, or the lowered guidance for next quarter in tomorrowis trading.

Buoyed in part by yesterdayis better than expected results from HP, the markets extended the big rally that was begun yesterday. Cienna also turned in positive results after yesterdayis closing bell, and Ann Taylor and Kmart turned in their own good news. While the markets did the mild roller coaster ride, investors were quick to buy on the dips. Coupled with another day of strong volume, the Bulls seem to be gaining strength. According to a CBS Marketwatch report:

"People are now convinced weive seen the bottom and are more afraid of missing it than of potential downside risks. Less pessimistic commentary from companies following their quarterly releases has been a driver," exclaimed Art Hogan, chief market analyst at Jefferies & Co.

This was echoed by other analysts as well, though not as strongly. From a Reuters report:

"I think people are afraid of missing the bottom. You get a lot of people saying: iDonit fight the Fed,i" said Donna Van Vlack, director of trading at Brandywine Asset Management, which oversees $7 billion. "I am not sure I believe what I am seeing though. You get knocked around so much that itis hard to hold your nose and jump into the pool."

Whither Apple? Our favorite PC maker took it on the chin during todayis rally, losing some 55 cents. The stock moved lower on no news, and volume was light. AAPL started off in positive territory, but shed almost a full dollar in a 50 minute span early in the morning session. The stock regained some of that loss as the day wore on, but never even came close to positive territory again.

You may be interested in knowing that Andrew Neff of Bear Stearns doesnit get Appleis retail strategy. Surprise, surprise. We will have a full report on that tomorrow morning.

Apple closed at 23.55, a loss of 0.5502 (-2.28%), on light volume of 5,893,900 shares trading hands.

The Nasdaq closed at 2193.68, up 27.24 (+1.26%), on volume of 2,152,582,000 shares trading hands.

The Dow closed at 11248.58, up 32.66 (+0.29%), on volume of 1,342,758,000 shares trading hands.

The S&P 500 closed at 1288.49, up 3.50 (+0.27%).

Adobe closed at 43.60, up 2.51 (+6.11%), on light volume of 4,048,600 shares trading hands.

Akamai and XO Communications have announced a new partnership that allows both companies to utilize each otheris technologies and services. AKAM closed at 10.29, a gain of 0.33 (+3.31%), on volume of 2,817,100 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 13.40, up 0.40 (+3.08%), on strong volume of 3,015,200 shares trading hands.

IBM closed at 115.07, down 0.73 (-0.63%), on light volume of 6,753,900 shares trading hands.

Macromediais closed at 20.91, a loss of 9 cents (-0.43%), on light volume of 784,000 shares trading hands.

Motorola may be increasing its involvement in Nextel. The company also won a big contract in Kazakhstan. Go MOT. MOT closed at 15.56, also a loss of 9 cents (-0.58%), on light volume of 7,870,700 shares trading hands.

Dell closed at 25.88, a gain of 50 cents (+1.97%), on volume of 37,423,900 shares trading hands.

Gateway closed at 19, up 0.61 (+3.32%), on volume of 2,409,000 shares trading hands.

Intel introduced a new Internet-on-a-Chip product today that could have a huge impact on handheld devices of the future. INTC closed at 28.60, a gain of 0.24 (+0.85%), on strong volume of 55,849,000 shares trading hands.

Microsoft will be releasing the Xbox on November 8th, just in time for Xmas. MSFT closed at 68.1698, a loss of 0.9902 (-1.43%), on strong volume of 50,897,300 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.