The Nasdaq resumed the tech stock rally that began on Halloween helped by news that technology-driven productivity in the US economy remained strong in the third quarter. Apple’s stock was the best performer in the computer hardware sector as it continues to rally for the fourth consecutive day.
The overall tone of the stock markets has dramatically improved from a week ago. Observers see continued upside for the rest of the year. However, the markets may enter a short period of doldrums in the next week ahead on November 7th Presidential elections.
Apple’s stock roared ahead by 1 13/16 to close at 22 5/16 on volume of 10.5 million shares. AAPL clearly broke above new resistance in the $20.75 zone, a bullish sign. Next resistance is in the $23 range. Last November AAPL climbed 20% in anticipation of a strong Christmas season. If Apple’s stock does as well this November it will be for more far-sighted reasons.
Digital Media Online released a survey that shows, "the Macintosh dominates digital video…the Mac makes up 58 percent of the marketplace. Windows and Windows NT trail with 41 percent combined. The survey also shows, however, that growth is favoring the various Windows platforms, which got a later start than the Macintosh."
Meanwhile, a ZDNet survey of customer satisfaction gave Apple and Dell "Support Star" awards as the best PC vendors in the areas of online support, phone support, and overall customer support.
The Mac Observer’s Dave Hamilton notes that many Mac users if polled on support issues might loathe to vote for a Wintel vendor over their favorite computer maker. However, it’s amazing that Apple was even in the running. Apple’s market share is a mere 3 to 4%, so Apple’s technical support must be pretty terrific to trounce vendors like Compaq who own 13 to 14% of the market.
The Nasdaq rallied 95 points (2.87%) to close at 3429 on volume of 2.1 billion shares.
The Dow sagged 18 points (-0.17%) to close at 10881 on volume of 1.1 billion shares.
The S&P 500 climbed 7.05 points (0.50%) to close at 1428.27.
In Apple related businesses: Akamai climbed 1 3/4 to 52 1/16. Adobe rallied 3 9/16 to 80 13/16.
Don’t you love it when investing professions downgrade a stock as it hoovers near 104-week lows? That’s what some genius analyst did at Goldman Sachs today, downgrading Earthlink from a nearly meaningless "market outperform" to an equally meaningless "market perform". In spite of the downgrade, Earthlink climbed 9/16 to 6 7/8.
IBM plans to install 15,000 Linux servers in Japanese convenience stores. Customers will able to download music, movies and other stuff from the Web using terminals throughout the stores. IBM jumped 3 3/8 to 101 15/16. Redhat Inc. (RHAT) gained 16% on the news to 17 7/8.
Market researcher Dataquest reported year over year worldwide server and workstation shipments were up 16.5% and 9.3%, respectively. CNET News reported:
"The top three server makers–Compaq Computer, Dell Computer and IBM–accounted for 58 percent of the worldwide server market during the third quarter. Overall, server makers shipped at slightly more than 1 million units during the quarter.
Houston-based Compaq widened its lead over IBM, coming in at 27.3 percent market share, compared with 26.5 percent in the third quarter of 1999. Compaq’s server shipments grew 20 percent, four points ahead of the overall market.
IBM saw its market share decline as Dell gained ground. For the third quarter, Armonk, N.Y.-based IBM had 16.4 percent share, down from 18.6 percent a year earlier. Dell, of Round Rock, Texas, gained more than two points to a 14.9 percent share, compared with 12.3 percent a year earlier. IBM’s and Dell’s server shipments grew 2.6 percent and 41.1 percent, respectively.
Compaq gained 1.38 to 31.42. Shares of Microsoft climbed 11/16 to 70 5/16.
Dell was number one worldwide in the workstation market in the third quarter with 23.6% of the mark, rising from 17.3% last year, that’s a 41% growth rate. Dell gained 1 3/8 to 31 13/16.
HP lost sever and workstation market share this year, down from 12.8% to 10.9%. Hewlett Packard climbed 5/8 to 45 1/16.
One of the benefits of owning your own brick and mortar stores is that you can have press releases with headlines like, "World’s Largest Computer Game Tournament Kicks Off Across U.S. and Canada This Weekend." Head to your nearest Gateway Country Store kids. Gateway’s stock fell 0.55 to 50.40.
Intel said its fourth quarter is on track and next year looks good, the news moved the entire semiconductor sector higher. Intel gained 1 13/16 to 46 11/16.
In economic news: Productivity, a measure of goods and services produced by each hour of work, grew at a 3.8% annual rate in the third quarter, that’s slower than the record breaking pace of 6.1% set in the second quarter but still well beyond what a survey of economists had expected.
Labor costs, a key gauge of inflation, rose at a 2.5% rate in the third quarter, the fastest pace in over a year and larger than the 1.9% increase economists had forecast.
In the last 12 months productivity has grown at a 5% rate, while labor cost growth, currently the most feared type of inflation, is up by a tiny 0.1%.
Meanwhile, the Index of Leading Economic Indicators, a key measure of US economic activity, was unchanged in September at 105.7 as economists had expected. The Wall Street Journal noted the flat leading indicators index is, "the latest sign that economic growth is continuing to cool down."
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 Apple’s stock activity, visit our updated Apple Stock Watch Special Report.