And on three, two, one, breathe! Investors are figuratively holding their collective breath in anticipation for this weekis, make that tomorrowis Fed meeting. Analysts are mixed on just what will happen at the meeting. Some see a 25 basis point (quarter point) cut, while others are still pulling for a 50 basis point (half-point) cut, but what impact either will have on the markets is just about anyoneis guess:
"To say that youill get a big rally on an event that was so widely anticipated goes against most peopleis understanding of how the market works," said Richard Cripps, chief market strategist at Legg Mason Wood Walker. "Where is your catalyst for higher stock prices? Itis not in earnings yet."
"After strength in the economic numbers last week, Iim not sure 50 basis points is a foregone conclusion anymore," said Tom Schrader, head of listed trading at Legg Mason Wood Walker Inc. in Baltimore. "Anything less is really going to throw the market for a loop."
Continuing that sour note:
"Stocks in all likelihood are going to go down tomorrow because 50 basis points are already expected and 25 arenit enough," said Michael Ranis, who helps oversee $500 million at Bank Hapoalim in New York. "If you feel the market is going down tomorrow, you might as well sell today."
The most poignant comment on this subject comes from another Reuters report:
"Itis all Fed-related," said Gerry Mastriani, president of GMST World Markets. "The entire world is waiting for Alan Greenspan to do something. From the bluest of blue chips to the smallest of ADRs, everythingis waiting for that to happen."
"The market is dying for some great news," he said. "If itis not great news, it is bad news. The market is just greedy at the moment, and it has been for the past year and half. They really want a push.
Preach on, brother. In the midst of the marketis anticipation, more economic data came out today that suggests that the economy does still need a boost. Despite data reported on Friday that shows that consumer demand is still jammini, a report issued today showed that US factory output is slipping. That should help ameliorate the strong consumer showing for April, but as you can see from the above quotes, there is absolutely no consensus on what will happen tomorrow. The good part of that is that we only have to wait until, well, tomorrow. Get ready for an interesting day.
As for todayis trading. There was very little of it. Volume was lighter than we have seen it in a very long time. The Dow checked in at under 900 million shares, while the Nasdaq showed less than 1.4 billion shares, a very light day indeed.
Interestingly, HP has moved into a place recently vacated by Gateway. The company will be providing kiosks where OfficeMax customers can order HP computers inside the retail giantis brick and mortar stores. Gateway pulled out of a similar arrangement with OfficeMax earlier this year, but more importantly, HP also has these kiosks at Staples and Office Depot, meaning a choke hold in the three largest office supply chains. Seems like HP has been makings some stealth moves that will position them nicely in the battle with Dell and Compaq for market share in the business sector. The markets didnit seem to care, and HP closed at 25.90, down 0.29 (-1.11%), on light volume of 6,455,800
There was some consolidation in the Web hosting/content delivery biz today. British Cable & Wire bought Digital Island for US$340 million in cash. DigitalIsland is a competitor with Akamai, the company that provides bandwidth for Appleis QuickTime TV and other QuickTime content delivery. Apple is also a major investor in the company, though the company has been steadily selling shares of Akamai for some time. C&W is wanting to boost its own presence in the Internet hosting and content delivery market. Digital Island shares rose some 8.31% to close just under the US$3.40 per share buying price from C&W. Shares of Akamai traded lower some 4.7%. CBS Marketwatch has a good report on this story.
Gil Amelio, former CEO of Apple and the many that brought Steve Jobs back to the company, has been hired on by Sienna Ventures, a venture-capitalist group. Mr. Amelio will be helping to shepherd companies that Sienna Ventures has invested large sums of money. Before taking on Apple, Mr. Amelio had a successful career as a turn-around artist and company builder.
Apple itself had a very good day today. The stock traded higher on a down day with absolutely no news. Edgar Online has posted the companyis SEC Q-10 quarterly report. In any event, AAPL spent almost the entire day in positive territory, trading on light volume. The stock traded in a range of 22.75 - 23.68.
Apple closed at 23.29, a gain of 0.44 (+1.93%), on light volume of 5,525,700 shares trading hands.
The Nasdaq closed at 2081.92, a loss of 25.51 (-1.21%), on volume of 1,339,225,000 shares trading hands.
The Dow closed at 10877.33, up 56.02 (+0.52%), on volume of 853,420,000 shares trading hands.
The S&P 500 closed at 1248.92, up 3.25 (+0.26%).
Adobe announced an eBook project with a group of universities. ADBE closed at 39.15, a loss of 0.71 (-1.78%), on very light volume of 2,685,700 shares trading hands.
Akamai closed at 8.90, a loss of 0.44 (-4.71%), on light volume of 1,680,100 shares trading hands. Apple is a large shareholder of Akamai.
Earthlink closed at 12.22, off by 0.62 (-4.83%), on very light volume of 898,200 shares trading hands.
IBM closed at 112.56, a gain of 0.75 (+0.67%), on very light volume of 5,137,600 shares trading hands.
Macromedia has announced new features for its Web development tools that allow easy checking of Web content for Fed accessibility regulations. This will help agencies, state offices, and other groups which choose or are required to make their content meet Fed accessibility guidelines. MACR closed at 19.81, down 0.44 (-2.17%), on volume of 1,294,300 shares trading hands.
Motorola is finding that loaning money to companies that need to borrow in order to buy may be a losing proposition. The company reported to the SEC that Telsim, a Turkish company, has missed a US$728 million dollar loan payment. Ouch. Never fear, Telsim has until the end of May to make up for it... This could potential impact Motorolais bottom line, though the loan was backed by 66% of Telsimis stock. MOT closed at 15.74, a loss of 0.26 (-1.63%), on very light volume of 6,310,200 shares trading hands.
Dell announced a new deal with H. Ross Perotis former company, EDS. DELL closed at 24.19, a loss of 0.29 (-1.18%), on light volume of 21,403,600 shares trading hands.
Gateway closed at 17.75, up 0.22 (+1.25%), on light volume of 1,195,900 shares trading hands.
Intel announced a new R&D facility which it says will help the company further advance their chip-making technologies. No one seems to have noticed and INTC closed at 27.41, a loss of 0.53 (-1.90%), on light volume of 41,221,700 shares trading hands.
Microsoft is gearing up for a run on the console market. With E3 occurring this week, the company is keen on making the Xbox a hit. MSFT closed at 68.72, a loss of 0.68 (-0.98%), on very light volume of 22,508,900 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.