Nasdaq Sinks But Apple Eeks Higher

The economic evidence clearly points to a slowing economy, thatis helping to ameliorate fears of higher interest rates. However, a decelerating economy brings with it lower corporate earnings and that seems to be holding stock prices in check.

Steve Jobs will appear on CNBC this afternoon at 5:45 EST to talk about Pixaris (PIXR) earnings, announced this afternoon at $0.16 per share, better than analystsi forecast of $0.14 per share for the second quarter. Revenues increased to $18.3 million from $13.5 million a year ago.

Apple gained 1/4 to 47 3/4 on volume of 4.48 million shares.

Money manager Elaine Garzarelli said in an interview with CBS MarketWatch she believes that technology stock prices will come back selectively, "...thereis a slowdown now going on all over the world, so we will have some slowness in earnings in the technology sector all around. Some stocks have already discounted that. Now, if you look at something like Applied Materials (AMAT), that stock is down 41 percent. Apple Computer (AAPL) is down 36 percent, and Gateway (GTW) is down 30."

thestreet.com reports, "On June 30, a higher percentage of U.S. stock funds owned shares of Dell, Compaq Computer, Sun Microsystems, Apple Computer and Gateway than at the start of the year. The only major PC shop that lost some of its fund following was IBM, and the biggest jump was in Sun Microsystems -- the strongest performer this year among these big-cap competitors."

The article reported the percentage of US stock funds holding shares in Apple on June 30th had increased to 13.0% from 11.2% at the beginning of 2000, while the percentage of technology funds with an Apple investment had climbed to 26.8% from 17.9% this year.

The Nasdaq fell 93 points (-2.42%) to end at the dayis low of 3769 on volume of 1.3 billion shares. After meeting fierce resistance around the Nasdaqis 200-day moving average at 3917 yesterday, the index continued to downtrend throughout todayis session. Biotechnology stocks (BTK) were off about 3.0%, semiconductors were also weak.

The Dow climbed 5 points (0.05%) to close at 10911 on volume of 933 million shares. Retail stocks fared poorly due to the Gapis (GPS) sluggish sales at its Old Navy division and Lands End Inc. missed earnings. Many analysts fear that consumer sales may be cooling off along with the slowing economy. The S&P Retail Index (RLX) was off by 3.39% today and down about 20% for the year to date.

The S&P 500 dropped 12.37 points (-0.84%) to close at 1460.50.

In Apple related businesses: Akamai slid 4 7/8 to 66 1/2. Adobe fell 3 1/2 to 112 13/16. Earthlink lost 7/16 to 10 5/8. Motorola fell 1/2 to 34 1/8.

IBM climbed 15/16 to 119 11/16 after signing a 10-year, $1.8 contract to provide technology services to contract electronics manufacturer Solectron (SLR). Bloomberg news said, "The agreement continues the momentum of IBMis services group, which last quarter signed three similar technology consulting agreements valued at $1 billion or more, plus 20 others valued at more than $100 million"

Appleis competitors: Gateway was higher by 1 1/8 to 60 7/8. Compaq gained 3/8 to 31 5/8. Shares of Microsoft dived 1 5/8 to 72 5/8. Hewlett Packard lost 1 7/16 to 112 5/16

Dell slipped 1/16 to 41 3/4. The PC giant announced earnings of $0.22 beating expectations for $0.21 a share, compared with $0.19 earned in the year-earlier period. Revenues came in at $7.76 billion, in line with forecast. Top line growth was a little weaker than expected but the company said it was on track for 30% full-year growth.

Intel fell 1 3/8 to 62 3/16. Intel announced a plan to buy privately held DataKinetics, a British company that makes equipment and software to control telephone networks.

Chip equipment maker Applied Materials (AMAT) posted net income of $604 million, or $0.70 per share, beating estimates of $0.68 per share vs. $0.31 earned in the year-ago quarter. Shares of AMAT fell 2 7/8 to 69 1/4.

In economic news: Import prices were flat during July, held in check by declining oil prices, economists had forecast a 0.1% gain in import prices.

Wall Street Journal noted, "Thursdayis report contained some cautionary signs, however. Prices for imported consumer goods rose in July for the first time since November, increasing 0.3%. And while prices for imported capital goods were flat, Standard & Pooris GlobalMarkets.com noted that such performance is actually "somewhat firm for this price component.""

The Labor Department released data showing that jobless claims are rising slightly, but the labor market remains extremely tight.

Tomorrow, look for the retail sales data from July, forecast to gain 0.4% and the producer price index which is expected to remain unchanged, while the "core" PPI is expected to show a 0.1% gain.

The Mac Observer Stock Watch Virtual Portfolio Lucent fell 9/16 to close at 40 13/16, just 10/16 above its 52-week low.

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 Apple Stock Watch Special Report.