Shares in Apple Inc. dropped more than 2.1% Monday as the market sold off tech shares in a broad retreat. There didn’t appear to be any Apple-specific news behind the drop, and one analyst told The Mac Observer that broader economic issues are at play in today’s tech losses.
AAPL ended the day at US$333.30, down $7.20 (-2.11%), on strong volume of 15.9 million shares trading hands. Other tech stocks in the red include Microsoft, which closed at $24.57, down $0.460 (-1.84%); Google, which closed at $518.42, down $11.13 (-2.10%); Cisco, which closed at $16.60, down $0.280 (-1.66%), and HP, which ended the day at $39.80, down $0.61 (-1.51%) .
Intel was one of the few tech winners on Monday, as the stock closed at $23.64, up $0.230 (+0.98%), on moderate volume of 74 million shares.
The tech-heavy NASDAQ ended the day at 2,782.31, off by 46.16 (-1.63%). The DOW, which puts much less emphasis on tech stocks ended the day with more modest losses, at 12,548.37, down 47.38 (-0.38%). The S&P also dipped, closing at 1,329.47, down 8.30 (-0.62%).
Shaw Wu of Sterne Agee (formerly with Kaufman Brothers) told TMO that Apple’s losses on Monday were, “less about company fundamentals and more about macroeconomic factors.”
He said that there is a lot of de-leveraging taking place in the markets as some brokerage firms have begun raising margin requirements, and that this may be exerting downward pressure on the markets, particularly tech stocks.
“Tech stocks in general are pretty weak,” the analyst said, noting that other factors affecting the markets include the ongoing economic downturn, concerns about unemployment, and numerous other issues that have little to do with Apple.
Mr. Wu currently maintains a target price of $445 on AAPL, with a “Buy” rating. In a May 4th research note to clients, the analyst said, “We continue to believe that AAPL is positioned to outperform in this tough macroeconomic environment with its defensible strategic and structural advantages and its vertical integration.”
AAPL Trading Chart for May 16th, 2011
Source: Yahoo! Finance
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.