The Election Standoff and HP's Poor Q4 Results Sink Tech Stocks

The week began with the US Presidential election still far from settled while Hewlett Packard missed its targeted earnings per share by a dime sending tech stocks into a tailspin. The Dow and the Nasdaq sustained midday losses in the triple digits then made a stunning comeback in volatile trading. Appleis stock dipped a dollar before racing back to end higher.

Biotech stocks ($BTK) were off as a group about 8% due to a Barronis article suggesting the sector is in a value "bubble" much like the Internet stocks experienced earlier in the year. It certainly is the only technology sector still left well in the black for the year and may soon become the last to correct in 2000.

Appleis stock climbed 5/16, or 1.64%, to close at 19 3/8 on volume of 7.6 million shares.

Apple cut prices on 500 MHz PowerBooks by $500 over the weekend. The calculates: "With the $200 rebate already making a PowerBook purchase attractive, Apple has taken an additional $500 off the 500 MHz unit, slashing its price to $2999, $2799 after rebate."

The speculated from rumors surfacing at Ars Technica, a pc website, that Apple has a research team "preparing a full x86 (Intel compatible) version of Mac OS X." However, editor Tony Smith reckons Cupertino is merely keeping its options open and has no plans to release a x86 version of OS X.

The Nasdaq shed 62 points (-2.06%) to close at 2966 on volume of 2.04 billion shares for a new 52-week low and the first close below 3000 since November of 1999. The Nasdaq has lost about 12% since the US election day (Nov.7) and today broke well below 3,000 intraday on high volume. The amazing comeback from the morningis 168 point plunge was without momentum according to some stock traders. The good news is that the Nasdaq bounced off its intraday low of 2859, which also happens to be a strong support level.

The Dow lost 85 points (-0.81%) to close at 10517 on volume of 1.1 billion shares.

The S&P 500 fell 14.72 points (-1.08%) to close at 1351.26.

In Apple related businesses: Akamai fell 3 1/4 to 45 7/8. Adobe lost 5 3/8 to 72 1/16. IBM rallied in spite of the negative market by 4 7/16 to 97 7/16 and so did Motorola, higher by 1 1/16 to 22 13/16.

Hewlett Packard had been forecast to earn $0.51 per share in the 4th quarter when the Palo Alto company announced earnings after extraordinary items of only $0.41 on revenues of $922 million. According to the Associated Press, "HP dropped its bombshell before the market opened Monday. The company had been scheduled to release its earnings Wednesday afternoon, but HP executives decided to accelerate the announcement when they realized how badly they had missed their earnings mark."

Hewlett Packardis deal to acquire the consulting operations of PricewaterhouseCoopers for a reported $18 billion also fell through today. The deal was expected to add significantly to HPis growth projections. Nevertheless, HP reported double-digit growth in all its product groups except monochrome printers and expects revenue growth for FY 2001 to fall in the 15 to 17% range. HP lost 5 dollars or 12.7% to 34 1/8.

Dell bounced off a recent 52-week low by 1 1/8 to 24 1/8. Compaq lost 0.46 to 25.24. Gateway was lower by 0.74 to 39 dollars.

Bill Gates opened the huge high-tech convention Comdex with a keynote address on Sunday in Las Vegas. His speech talked about the importance of being profitable in the business world and promoted Microsoft products including the Micorosft.NET initiative. Gates also knock the idea that everyday computing tasks will migrate from the desktop to the tiny screens of handheld devices or cell phones. Shares of Microsoft lost 15/16 to 66 7/16.

In economic news: Look forward to a busy week of new economic numbers and perhaps a new policy statement from the Federal Open Market Committee which meets on Wednesday to review interest rates. Tomorrow retail sales numbers for October and the American Petroleum Instituteis oil stockpile data are released.

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.