Stocks tanked today. The Dow and the Nasdaq both took it on the chin following several days of gains during the last few weeks. Profit taking set in as reawakened fears about the labor market reared their ugly heads one day in advance of the official jobs report data expected tomorrow. This was sparked primarily by a report that new jobless claims had reached a 5-year high while the four week moving average had reached an 8 1/2 year high. Some analysts are suggesting that we should get used to the up and down movement of the markets. According to a CBS Marketwatch report:
"Weire on the road to recovery but itis a long, slow pull. Itis a pattern weill probably see more of in the weeks ahead -- a few good days followed by ugly ones. Despite Thursdayis pullback, weire creating a trading range toward the upside. Itis no tremendous market weire in, but we have had a terrific rally over the past five weeks," observed John Forelli, senior vice president and portfolio manager at Independence Investment.
"Granted, the economy is still rocky and that has people worrying that the recovery will be pushed out further into the year. People are looking to Fridayis employment report, which is expected to show more weakness. If youire buying stocks [now], youire buying not based on Fridayis employment report, but on the one six months from now," he concluded.
Another factor affecting tech stocks was news that Dell, Compaq, and Gateway are all prepared to duke it out with a price war. Apple fights for market share with new models, while PC manufacturers cut prices. Itis going to get bloody. Compaq actually lost money in its PC business in the most recent quarter, while losing market share to Dell, who has also taken a big hit in their own margins. Gateway is keeping up with both companies with their own price cuts. TheStreet.com has an excellent report on this subject that we recommend.
In the meanwhile, Dell was hit with some bad news of their own. The company is recalling some 284,000 laptop batteries. The problem with the batteries is that, wait for it, they may overheat and catch fire. Sounds like something that Apple was hammered on a few years ago (Think PowerBook 5300). Dell was downgraded by UBS Warburg over concerns that the above mention price war wasnit going to do anyone any good whatsoever (except consumers, but thatis another issue). According to a CBS Marketwatch report:
Further pressuring the stock was news that UBS Warburg analyst Don Young lowered his rating on the PC makeris stock to a "buy" rating from a "strong buy." Young said he is concerned about Dellis continued price aggression, and worries that the PC industryis sacrifice of short-term profitability will not lead to long-term gains.
To recap, all the PC manufacturers are stuck in a rut and are being forced to cut prices in order to keep up with the Dellis. Give us a moment while we go and wash our hand of all this grubby Wintel news...
Macromedia was downgraded from a Buy to a Market Perform by Tucker Anthony analyst Aaron Scott. Mr. Scott was quoted as saying "We believe that the situation at (Macromedia) will get worse before it gets better" in a Reuters report. Macromediais shares were hammered today for a 22% loss on strong volume.
Apple has made available a full streaming QuickTime movie of Steve Jobsi iBook presentation form Tuesday, May 1st. Itis big, but itis a good presentation.
Apple was hammered along with the rest of the tech sector. The stock started off 4 bits lower and kept right on trucking southward. AAPL traded on light volume with a range of 24.73 - 26.25.
Apple closed at 24.96, a loss of 1.63 (-6.13%), on light volume of 5,365,000 shares trading hands.
The Nasdaq closed at 2146.20, a loss of 74.40 (-3.35%), on volume of 2,001,183,000 shares trading hands.
The Dow closed at 10796.65, off by 80.03 (-0.74%), on volume of 1,108,335,000 shares trading hands.
The S&P 500 closed at 1248.58, down 18.85 (-1.49%).
Adobe is suffering from the guilty-by-association effect of Macromediais poor results that were turned in yesterday. ADBE closed at 40.63, a loss of 2.20 (-5.14%), on light volume of 4,075,200 shares trading hands.
Akamai closed at 10.14, a loss of 1.32 (-11.52%), on heavy volume of 5,053,700 shares trading hands. Apple is a large shareholder of Akamai.
Earthlinkis founder is being investigated by the SEC for investor claims that he bilked them of millions of dollars. ELNK closed at 13.18, a loss of 0.02 (-0.15%), on volume of 2,967,500 shares trading hands.
Gateway closed at 18.39, a loss of 0.62 (-3.26%), on light volume of 1,839,500 shares trading hands.
IBM closed at 115.40, down 3.11 (-2.62%), on volume of 9,706,200 shares trading hands.
Macromedia was sucker punched today after their poor earnings report and a downgrade. MACR closed at 20.60, a loss of 5.98 (-22.50%), on strong volume of 5,271,300 shares trading hands.
Motorola was named GM Supplier of the year (2000). MOT closed at 15.86, a loss of 0.62 (-3.76%), on light volume of 9,358,500 shares trading hands.
Dell closed at 24.93, down 1.80 (-6.73%), on strong volume of 42,766,800 shares trading hands.
Intel closed at 30.4002, a loss of 1.5198 (-4.76%), on light volume of 36,284,200 shares trading hands.
Microsoft is being victimized by a hacker who has released a tool that other script kiddies can use to take over a Windows 2000 server unless it has been patched with a security fix. For the third day in a row, we sit stunned at security news concerning Microsoft. MSFT closed at 68.53, a loss of 1.23 (-1.76%), on light volume of 32,809,600 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.