Monday was quite a strange session, although sleepy as almost every day of 2013 has been other than the first. What was old was new again as Dell Computer (DELL) jumped 13% on reports it is considering taking itself private. Meanwhile recent darling Apple (AAPL) was socked in the face yet again with another 3.6% loss as the WSJ reported component orders for iPhones were slashed dramatically. I suppose Apple could be considered old school as well, but not the new version of it with the iPhones and the iPads. As for the indexes, the S&P 500 fell 0.09% and the NASDAQ 0.26%. Traders remain frustrated as there has been almost no action in 2013 as all the year's gains essentially came on the first day of the year.
The S&P 500 continues to hold onto all gains and gyrate in a smallish range near the top end of its ascending channel. Next we have to see if it's building up energy for a run at breaking those intraday highs of September, or a filling of the gap created from the first day of 2013 is in order.
The NASDAQ continues to remain in a similar state, although the weight of Apple has had it underperform. That said, considering it was a rough day for both Apple and Google (GOOG) the index held in quite well.
As for Apple the news was as follows:
Shares in Apple Inc dipped below $500 for the first time in almost one year after reports it is slashing orders for screens and other components as intensifying competition erodes demand for its latest iPhone. Apple has asked Japan Display, Sharp and LG Display Co Ltd to roughly halve supplies of LCD panels from an initial plan for about 65 million screens in January-March.
The stock has now given up almost a year's worth of gains:
With Dell the news was taken as positive by the Street
Shares of Dell Inc soared to a near eight-month high on Monday after Bloomberg reported the world's No. 3 PC maker is in talks with at least two private equity firms about going private. The discussions between the PC maker, which has steadily ceded market share to larger rival Hewlett Packard and China's Lenovo, and private equity are preliminary and financing has not been secured. Like HP and Lenovo, Dell is grappling with dwindling demand for traditional desktop and laptop computers with the advent of tablets like Apple Inc's iPad. Sales of PCs over the holidays slid for the first time in more than five years, according to industry researcher IDC. The company saw shipments of computers plummet 21 percent in the fourth quarter, according to IDC. In the third quarter, its profit slid 47 percent.
The metrics between the two companies are complete opposites but it shows why just looking at growth rates is not enough for stock investing, especially in the short to intermediate run. Apple - despite stellar (but slowing) growth rates - has been getting hit for months, while today a major also ran in a shrinking industry, skewered short sellers who were targeting the company.
The rest of the week will be dominated by earnings reports, especially Wednesday forward as some of the top names in America report. Stay tuned.