The Spirit of the Season Lifts Retail Stocks While Techs Languish

After an unsustainable 94 point extension of Fridayis traditional post-turkey day rally, tech stocks fell back below 2900. However, on the Dow, retail stocks led the market higher on hopes for decent, if not spectacular, holiday season sales. Apple stock couldnit hold Fridayis gains.

Part of stock marketsi fear of a slowing economy is based on the belief that consumers have tapped out their credit as indicated by the steadily declining personal-savings rate. Yet, economists point out that the Commerce Department does not count "... money that is actually accumulating in retirement plans and private investment portfolios" as savings.

According to the Wall Street Journal, " Recently economists Richard Peach and Charles Steindel of the New York Federal Reserve included capital-gains income in calculating the savings rate. They found that the savings rate was really 10% in 1999, 1.4 percentage points higher than the same figure in 1995 and almost eight percentage points higher than the Commerce Department rate in 1999." Because of the higher savings rate consumers arenit as in debt as they appear, thus sales this December might be stronger than one would assume using the Commerce Departmentis data alone.

Appleis stock dipped 5/8, or -3.24%, to close at 18 11/16 on volume of 4.5 million shares.

The Nasdaq shed 23 points (-0.82%) to close near the lows of the session at 2880 on volume of 1.6 billion shares. Analysts cut their ratings on a number of semiconductor stocks on fears that demand is slowing. Chip maker stocks fell about 7% as a group in response.

The Dow rallied 75 points (0.72%) to close at 10546 on volume of 923 million shares.

The S&P 500 climbed 7.24 points (0.54%) to close at 1349.01.

In Apple related businesses: Banc of America downgraded Adobe (ADBE) because it had exceeded their price target of $73 per share and the stock dutifully pulled back by 7 1/6 to 68 13/16. Analyst Greg Vogel cited "weakness at Apple Computer" as one reason Adobeis revenue growth rate has "leveled off."

Earthlink lost 1/2 to 7 1/16. IBM gave back 1 1/2 to 98 7/16. Motorola lost 3/8 to 21 11/16.

Tulip Computers, a Dutch PC maker and owner the Commodore brand name, filed a lawsuit worth potentially $17 billion against Dell over a patent dispute, "covering the internal chassis of AT-class PCs, popular since the mid-1980s," according to a Reuters report. Dell gained 1/16 to 24 7/16.

Compaq gained back 0.12 to 24.81 and Gateway was lower by 1.35 to 32.15.

Microsoftis lawyers filed a brief with the U.S. Court of Appeals for the District of Columbia complaining that Judge Thomas Penfield Jacksonis earlier ruling, which found Microsoft guilty of antitrust violations, was in error. Shares of Microsoft gained 3/4 to 70 11/16.

U.S. Bancorp Piper Jaffray analyst, Ashok Kumar, sees Intelis unit sales growth next quarter sequentially 10% higher, thatis better than the companyis own projections. Mr. Kumar said Intel should experience sales growth of 15% for fiscal 2001. He also said that Intel gave up some market share to Advanced Micro Devices (AMD) recently but that trend shouldnit continue. Intel traded flat at 43 15/16.

In economic news: Existing home sales dropped a greater than forecast 3.9% in October after declining in September too.

According to the Wall Street Journal other factors besides mortgage interest rates "are beginning influence potential home buyers: iIn particular, income growth is flattening out, stock prices are falling, and there are tentative signs that the consumersi near infallible optimism is beginning to ebb,i said economists at Lehman Brothers in a research note to clients."

A busy economic data release calendar is driving hopes on Wall Street for some evidence to emerge that pushes the Federal Reserve to shift their tightening bias into neutral during the next FOMC meeting in December.

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.