Techs Rally, Apple Closes Up 6.6%

| Apple Stock Watch

The markets sheened up and down like the newest roller coaster at a Six Flags theme park. The Nasdaq twisted and gyrated vigorously as pre-announcements pulled the markets to and fro with abandon. Investors are still worried about corporate profits ahead of next weekis announcements, but rumors began spreading that companies like Apple would meet or exceed their consensus estimates. The gains were only enough to give the Nasdaq a 9 point boost and the Dow a 65 point gain, however. From a CBS Marketwatch report:

"This is a market that canit seem to get out of its own way. Stocks take one step forward and two steps back," claimed Peter Cardillo, chief strategist and director of research at Westfalia Investments. "[Stocks] remain in a sea of uncertainty and the clouds hovering over them could burst any minute."

The Nasdaq traded on stronger volume than the late norm with 1.7 billion shares trading hands. The Dow traded some 1.3 billion shares.

Industry News

Microsoft makes the Stock Watch twice today. The first is that the company has announced it has revised its licensing structure to allow PC vendors to remove the Internet Explorer icon from the desktop and Start Menu of Windows XP and earlier versions of the OS. That is, if they want to. The company says the decision came in light of the appeals court ruling that the companyis licensing restrictions was illegal. From Microsoftis press release:

"We recognize that some provisions in our existing Windows licenses have been ruled improper by the court, so we are providing computer manufacturers with greater flexibility and we are doing this immediately so that computer manufacturers can take advantage of them in planning for the upcoming release of Windows XP," said Steve Ballmer, CEO of Microsoft. "Windows XP represents a revolutionary step forward in personal computing, and computer manufacturers and consumers are looking forward to this product with great anticipation."

"This announcement does not take the place of settlement discussions with the government parties or any future steps in the legal process; however, we wanted to take immediate steps in light of the courtis ruling. We are hopeful that we can work with the government parties on the issues that remain after the courtis ruling," Ballmer added.

This marks not only a radical shift away from insisting the company would NEVER agree to do this, but it also really shows that the company is willing and ready to settle their antitrust suit without further litigation. Whether the 19 statesi Attorneys General and the US DoJ are so inclined has yet to be seen. We will have a more in depth analysis of this development tomorrow at The Mac Observer.

The second, and more important to Wall Street, bit oi news is that the company has announced it expects to beat forecast revenue expectations. The company announced that it will announce (eh?) higher revenues and a lower profit. The lowered profits came from charges the company will take because of some failed investments (Think Dot-Com). From a CBS Marketwatch report:

Investors took heart on Microsoftis announcement that sales will come in between $6.5 billion to $6.6 billion, compared with the previous range of $6.3 billion to $6.5 billion. The company will report earnings of about a penny a share, vs. expectations of 42 cents a share, according to First Call/Thomson Financial. The company reports results on July 19. Excluding the net investment loss of $2.6 billion, Microsoft (MSFT: news, msgs, alerts) would have reported earnings of 48 cents a share, topping First Callis consensus by six cents.

"Core revenue growth for the quarter was strong and reflects consumer enthusiasm for our products and services despite a slowing economy," John Connors, Microsoftis chief financial officer said in a statement. "With the recent launch of Office XP and the upcoming launches of Windows XP and Xbox, we are excited to see another strong product cycle for the company underway."

Analysts and investors alike are ignoring the charge and focusing on the fact that Microsoftis real earnings are higher than expected. The significance of that is that Microsoft is the first tech company to give an indication that the previous quarter might not have been that bad. Tech stocks skyrocketed after hours.

Apple Industry News

TheStandard.com has published an excellent report on online report cards that focuses heavily on PowerSchool, which is owned by Apple. The report includes quotes from parents and administrators alike who had nothing but praise for PowerSchool.

SmartMoney.com has published commentary saying that Mac OS X edged out Windows XP. From the editorial:

Case in point: the shifts happening this year in computer operating systems. Next week in New York, Steve Jobs of Apple Computer will address the Macintosh faithful waiting for news of patches, bug fixes and upgrades for the companyis recently released OS X operating system. Later this year, Microsoft will counter with a package of desktop and Internet integration called Windows XP. Never mind all the talk youill hear of the New New Thing: Neither operating system will take computer users very far beyond the digital version of the IBM Selectric theyive grown accustomed to in the last two decades.

Between the two, though, I think the balance of the account falls squarely in favor of Appleis OS X. Iive been using OS X on a daily basis for the last month, running on Appleis spiffy G4 PowerBook laptop, and I believe it will be a blessing for consumers. It may even boost the fortunes of Apple Computer, but not without a lot more hard work.

Yahoo!is In Play featured Apple as being on the move due to reports that the company would meet or exceed current estimates. From In Play:

Stock outperforming its group today; hearing street talk that the company will meet or beat numbers this quarter; Needham reportedly was commenting this afternoon that AAPL will beat numbers.

AAPL started the day down, but quickly moved into positive territory and steadily moved higher throughout the day. The stock traded in strong volume of 8.3 million shares, and closed 1 cent off the dayis high. The trading range for AAPL was 21 - 22.55.

Apple closed at 22.54, a gain of 1.40 (+6.62%), on strong volume of 8,383,500 shares trading hands.

The Nasdaq closed at 1972.04, up 9.25 (+0.47%), on volume of 1,771,890,000 trading hands.

The Dow closed at 10241.02, up 65.38 (+0.64%), on volume of 1,378,637,000 trading hands.

The S&P 500 closed at 1180.18, down 1.34 (-0.11%).

Adobe closed at 41.44, down 1.51 (-3.52%), on strong volume of 4,803,500 shares trading hands.

Akamai closed at 7.70, up 0.07 (+0.92%), on light volume of 1,425,400 shares trading hands. Apple is a large shareholder of Akamai.

Earthlink closed at 14.03, a loss of 0.16 (-1.13%), on light volume of 1,329,100 shares trading hands.

IBM closed at 103.85, up 1.89 (+1.85%), on strong volume of 8,826,000 shares trading hands.

Macromedia closed at 16.52, down 0.53 (-3.11%), on very light volume of 321,800 shares trading hands.

Motorola closed at 15.67, up 0.17 (+1.10%), on strong volume of 15,337,800 shares trading hands. Motorola manufactures the processors used in Appleis Macintosh line.

Dell closed at 25.98, a gain of 0.37 (+1.44%), on light volume of 25,988,600 shares trading hands.

Gateway closed at 14.11, higher by 4 cents (+0.28%), on volume of 1,657,100 shares trading hands.

Intel closed at 28.06, up 0.27 (+0.97%), on strong volume of 49,948,200 shares trading hands.

Microsoft closed at 66.50, a gain of 2.02 (+3.13%), on volume of 34,771,100 shares trading hands.

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