The Euro, Energy, and Earnings Drag on the Dow, But Apple and the Nasdaq Climb

The story of the three Es continues. The euro declined to new lows against the dollar and the yen, while oil prices set a new 10-year high on news that US crude-oil supplies continue to fall. The Dow got clobbered, but tech stocks looked better. In spite of grim current events, investors are looking for reasons to buy. Apple traded higher after a weak morning.

The Wall Street Journal observed, "Third-quarter earnings worries, stoked by the high price of oil and the effect of the weak euro on U.S. companies with substantial business in Europe, held down the market. Several companies have warned this month that rising energy prices and the eurois weakness will likely hurt earnings, and other third-quarter warnings roiled the market Wednesday."

Volatility has returned to the stock markets after a calm summer and many investors were reminded of how poorly the markets have often performed in past Octobers by todayis sell-off, which pushed the Dow down by 220 points by mid-session .

Apple climbed 1 7/64 or 1.85% to close at 61 3/64 on volume of 4.05 million shares.

Early Mac OS X reviews are starting to appear in the mainstream press. Business Weekis Charles Haddad comments, "With OS X, Apple is actually leaping ahead of Linux and Windows, which have been upgrading their operating systems on a more regular basis for the past 10 years." But he warns, "Accepting OS Xis changes wonit come easily, especially for older users, such as myself, whoive been using the current system for 15 years. OS X entails learning new routines."

QuickTime got a promotional boost as Apple announced, "Madonnais Music, a new 10-song CD, is immediately available exclusively at www.madonnamusic.com exclusively in Appleis QuickTime format. In addition, two forthcoming video remixes of the albumis first single, the title track Music, will be available at www.madonnamusic.com exclusively in QuickTime."

The Nasdaq fell 71 points this morning, but then the index came back from the red to climb 31 points (0.82%) to close at 3897 on volume of 1.79 billion shares.

The Dow continued lower, for the sixth day in a row, by 101 points (-0.94%) to close at 10687 on volume of 1.1 billion shares. There were plenty of new 52-week lows today including Alcoa, DuPont, International Paper and AT&T.

The S&P 500 dropped 8.56 points (-0.59%) to close at 1451.34.

In Apple related businesses: Akamai shed 1 5/16 to 60 5/8. Adobe climbed 4 7/8 to 157 3/4 yet another new high. Adobe appointed Antonio M. Perez, president and chief executive officer of GEMPLUS and a former Hewlett-Packard president, to the Adobe board of directors.

Earthlink fell 1/8 to 10 3/16. IBM lost 9/16 to 124 3/8.

Motorola unveiled a new mobile phone handset, "equipped with a rubber overmolded grip, large raised buttons and an emergency call button, is designed to endure water, dust, shock, and vibration." according to Reuters. Motorola shed 15/16 to 34 5/8.

Appleis competitors: Dell gained 2 1/4 to 38 9/16 after the companyis vice chairman say PC components prices are starting to drop and was confident Dell would meet 30% year over year growth expectations.

Gateway was lower by 0.80 to 59.45. Compaq gained 3/16 to 31 3/16. Hewlett Packard lost 3 15/16 to 102 9/16

Microsoft is such a monopoly they receive support for vaporware years in advance. According to a PRNewswire article, many of the top game developers have announced they will support Microsoftis video game console, Xbox, a full year ahead of the Xbox launch. Shares of Microsoft slipped 3/4 to 64 1/4.

Intel is expected to push its Personal Internet Client Architecture at a developer forum in Tokyo as the standard for building wireless Internet devices, including cell phones and handhelds. Intel jumped 2 11/16 to 63 1/4, helped by some positive analyst comments.

In economic news: The Commerce Department said the US trade deficit increased to a record $31.89 billion in July pushed higher by imported oil prices. The widening trade gap was greater than economists had expected.

The Mac Observer Stock Watch Virtual Portfolio. Lucent (LU) fell 1 3/16 to 34 7/8 as the telecom sector lost 3.5% today after Sprint PCS (FON) issued earnings warnings and picked up a few downgrades on growth concerns for the wireless business.

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.