Whiplash Bottom in the Markets, Apple's Earnings To Be Announced Today

The Dow fell 435 points first thing this morning in panic selling. The Nasdaq was off by 187 points. Then buyers rushed in and rallied the Nasdaq into the green, but late day softness pushed the Nasdaq back into the red and the Dow closed below 10,000.

There was a sense of panic selling and capitulation this morning. It didnit last more than an hour, but in todayis highly wired world such oversold buying opportunities are dilating as all types investors master online trading.

OK, forget the "trying to catch falling knives" analogies, this has got to be at least a short term bottom. Why? Because sellers are scarce, theyire nearing exhaustion. Buyers are still cautious, but with every market dip at this level value hunters have quickly swamped sellers.

Of course, another way to look at the stock markets is that recent rallies have failed. Is the glass half full or half empty? Are the margin accounts going to be forced to capitulate or are the bears going to cover their short positions setting off a major rally? Floor traders still donit see panic among the short sellers. And volume was higher during the morning sell-off than during the rally back. The jury is still out on whether weive made a market bottom, but most observers believe weire very near it.

Value hunters have to be quick and selective in this market. If you missed this morning buying opportunity, donit worry youill get it again. Remember, the US Presidential elections are weighting on the stock markets as a source of uncertainty, as well as the instability in the Middle East and a slowing economy.

Appleis stock traded flat at 20 1/8, after dipping to a new intraday 52-week low of 18 3/4 on continued high volume of 13.6 million shares.

Apple will provide live audio streaming of its fiscal year 2000 and fourth quarter results conference call via QuickTime Today at 2 PM PDT.

The Nasdaq lost 42 points (-1.32%) to close at 3171 on volume of 2.4 billion. The Nasdaq made a new 52-week intraday low this morning on the 3rd largest volume in history. The Nasdaq 100 was down only about 35 points, indicating that the big caps fared better than smaller issues.

The Dow fell 114 points (-1.14%) to close at 9975 on very high volume of 1.4 billion. This is the first close below 10,000 for the Dow since March 14th.

Chase Manhattan bank (CMB) missed earnings yesterday and took the blame for the 435 point sell-off this morning, which slaughtered the financial stocks. JP Morgan (JPM) was off by $17 in the morning but ended off only 2 3/16 at 135 7/16 by the market close.

The S&P 500 lost 7.87 points (-058%) to close at 1342.

In Apple related businesses: Akamai lost 8 3/4 to 40 3/8. Adobe fell 3 7/8 to 129 1/16.

IBM jumped 6 dollars to 109 1/8. Yesterday, the company announced earnings of $1.08 as forecast, but revenues came in at $21.8 billion, hit by the weak euro. Forecasts were for IBM to have revenues of 22.4 billion. The profit margin was flat at 35.8%. Today, the inevitable round of downgrades began.

Sun Microsystems (SUNW) announced earnings of $0.30 handily beating estimates of $0.26, while revenues soared 60% to $5.05 billion and net income is up 85% from last year at this time.

Appleis competitors: Dell gained 1 7/8 to 26 1/4. See a dueling Dell bear go after a Dell bull in an interesting article at Motleyfool.com

Compaq gained back 1.48 to 25.23. Shares of Microsoft climbed 1 5/16 to 51 3/4, look for Redmond to announce earning this afternoon. Intel soared 2 dollars to 38 3/16. Gateway was higher by 0.22 to x50.04

In economic news: Consumer prices climbed 0.5% in September, largely due to higher energy costs, for their biggest gain since June. The consumer price index so far this year is higher by 3.8% as compared to 2.7% in 1999. This morningis sell-off on the Dow may have in part been related to inflation fears due to Septemberis stronger consumer prices.

Housing starts were up 0.3%, maintaining their healthy levels.

The Wall Street Journal explained, "The increase in the consumer-price index, the governmentis most closely watched inflation gauge, followed Augustis 0.1% decline -- the first drop in 14 years. Outside of the expected surge in energy prices, the inflation news was more subdued. The so-called core CPI, which excludes food and energy prices, advanced 0.3% in September after rising 0.2% in August, the Labor Department said Wednesday."

We have recently updated the Apple Stock Watch Special Report as an archive of all Mac Observer stories about Appleis finances. For full quotes on all the companies mentioned in this article, we have assembled this set of quotes at Yahoo! for your reference.