Markets Rally Off Recent Lows, Apple Trades Higher

A strong across the board rally swept the oversold US stock markets on the day after the Nasdaq touched rock bottom support. Appleis stock extended its gains from yesterday.

Goldman Sachs & Co.is Abby Joseph Cohen and Ed Kerschner of PaineWebber Inc. are credited in the media for setting off todayis rally. The wise Ms. Cohen noted that equity valuations are the most attractive they have been all year, while Mr. Kerschner believes the weakness caused by the Presidential electionis uncertain outcome is an excellent buying opportunity.

"The fundamental picture remains favorable," said Ms. Cohen. "As expected, economic and profit growth have slowed from last winteris rapid pace yet remain at or above trend rates. Inflation fears have cooled, despite the rise in energy prices."

Appleis stock ended higher by 7/8, or 4.52%, to close at 20 1/4 on volume of 7.1 million shares.

The Nasdaq rallied by 171 points (5.78%) to close at 3138 on volume of 1.7 billion shares to end a six day losing streak. The Biotech sector ($BTK), after an 11% drop yesterday, was the only sector on the Nasdaq to continue south today. The Nasdaq is still down over 8% since election day.

The Dow climbed 162 points (1.55%) to close at 10679 on volume of 1.08 billion shares.

The S&P 500 climbed 31.70 points (2.35%) to close at 1382.96.

In Apple related businesses: . Adobe rallied 9 9/16 to 81 5/8. IBM jumped 2 dollars to 99 7/16. Motorola gained 1 1/8 to 23 15/16.

Akamai climbed 2 15 /16 to 48 13/16 after Robertson Stephens initiated coverage on the stock with a buy rating. Analyst Richard Juarez wrote:

"We consider Akamai the leader in the content distribution and delivery industry, a quickly growing market projected to reach $6 billion in annual revenue in 2004 from near zero in 1999. Akamai is also a leader in the streaming media industry and outsourced storage service provider industry, bringing the company’s total addressable market to an estimated $20 billion or beyond by 2004 in our estimation. We believe that the company will ultimately generate high gross margins in the 65% to 70% range, and EBITDA margins in the 30% to 40% range. We believe Akamai can use its existing server network to deliver additional services at relatively low incremental investment, and that its technology lead and early establishment of a large, global footprint constitute significant barriers to competition".

Compaq gained back 2.03 to 27.27 after announcing a deal to use Infospaceis wireless Internet platform on Compaqis iPAQ Pocket personal computer.

After Bill Gates claimed in his Comdex keynote address that PCs fully loaded with Windows still rule, Larry Ellison, CEO of Oracle (ORCL) points out, in his humble opinion, thin clients are the way of the future not "fat clients." Many businesses are moving mission critical applications from scattered PC hard drives to centralized network servers. "The only things left on PCs are Office and games," Mr. Ellison exclaimed. "Youire considered a dead company if you write applications for the PC." Shares of Microsoft climbed 2 3/8 to 68 13/16.

Also at Comdex, Carly Fiorina, CEO of Hewlett Packard said in her keynote address a digital renaissance beckons the world thanks to the Internet. "But it requires a change in the way we think and behave," she said, "and to trust people to add inventiveness to our solutions, because the next solutions on the Net will be the everyday acts of many." Hewlett Packard climbed 3 5/16 to 37 7/16.

In economic news: Retail sales gained a measly 0.1% in October, largely due to slowing demand for cars, after a 0.9% gain in September. Excluding autos, retail sales rose 0.4%.

The Wall Street Journal reported, "Overall retail sales advanced 7% in October from a year earlier, while sales excluding autos climbed an even stronger 7.6%."

Look for the American Petroleum Instituteis oil stockpile data to be released late this afternoon and tomorrow the Federal Open Market Committee meets to review interest rates. Observers are anticipating no change in the Federal Reserveis policy bias on interest rates.

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.

Popular TMO Stories

No Comments

Log in to comment (TMO, Twitter or Facebook) or Register for a TMO account