Triple witching option expirations and index changes in the Nasdaq 100 added volume and volatility noise to the market signal on Friday, but the message came through loud and clear: The stock markets are bracing for slower growth across the board in 2001 and tax loss selling as this year comes to an end.
Next Tuesday the Federal Reserve meets to decide the direction of interest rates. Wall Street is expecting the Fed to change its bias away from further tightening of the money supply, but few expect interest rate cuts till early next year. If the Fed does cut interest rate on Tuesday it will be tantamount to admitting they screwed up by raising rates too much, too quickly and are afraid the economy is now tipping into a recession.
Appleis stock lost 1/16 or -2.60% to 14 1/16 on volume of 8 million shares.
Brad Gibson of Maccentral.com reviews Appleis latest annual report and finds fiscal 2000 looks pretty good in retrospect. However, in 2001 net sales are likely to decline from this yearis level.
The Nasdaq fell 74 points (-2.72%) to close at 2654, well off the sessionis low of 2596, on high volume of 2.5 billion shares. The Nasdaq lost 282 points this week.
The Dow fell 240 points (-2.25%) to close at 10434 on volume of 1.5 billion shares for a 285 point loss this week.
The S&P 500 lost 28 points (-2.15%) to close at 1312.14 for a 6% loss this week.
In Apple related businesses: Akamai gained 11/16 to 33 5/16. Earthlink lost 7/16 to 7 1/4.
Adobe reported earnings of $0.34 per share beating estimates of $0.29. Total sales increased to $355.2 million from $281 million a year ago. Shares of Adobe rallied 5 1/8 to 62 7/16
Meanwhile, Adobe "named President Bruce Chizen to the additional posts of chief executive officer and member of the board," reported CBS Marketwatch. "Chizen replaces John Warnock, Adobe chairman and former CEO, who is now chief technology officer, a newly created position."
IBM lost 4 5/8 to 87 13/16 dragged down by fears Microsoftis lagging sales may be related to a broad slowdown in corporate IT spending.
Microsoft warned that its second-quarter profits and revenues would miss earlier forecasts by about 6%. Redmond also lower guidance for next year. A number of analysts chimed in with their own downgrades and lowered estimates. Shares of Microsoft fell 6 5/16 to 49 3/16.
Oracle, Microsoftis archrival, beat its earnings expectation yesterday by a penny with $0.11 per share. Revenues increased to $2.6 billion, a 16% increase year over year and better than the forecasts of $2.3 billion. The Internet database company sees no slow down in its business. Oracle gained 1 3/8 to 28 7/8.
Due to slack PC demand, Gateway said it will begin to carry some inventory in its showrooms. Gateway lost 0.19 to 18.60.
Hewlett Packard is one of the few PC manufacturers that hasnit warned yet, so the analysts warned for them. Goldman Sachs lowered its revenue and earnings per share estimates for the company in 2001. HP lost 1 3/4 to 31 3/4.
Shares of Compaq fell 1.35 to 17.35, a price level not seen since 1996.
In economic news: Consumer prices rose 0.02% last month as energy, housing and clothing costs remained steady. Industrial production fell 0.2% in November due to lower output from U.S. auto makers slow as auto sales drop off.
Todayis data is further evidence of a slowing economy with little sign of inflation and just one more reason for the Federal Reserve to lower the prime lending rate.
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.