Apple briefly falls below $400
Shares tumble on reports of weakening iPhone and iPad demand. But buying kicks in as soon as $400 is breached.
Apple (AAPL) was a huge weight on the stock market Wednesday, as the stock briefly fell below $400 for the first time since December 2011.
The shares closed at $402.80, down $23.44. They had dropped to as low as $398.11. The day's intraday low and the closing price were Apple's lowest since Dec. 22, 2011, when it finished at $398.55.
In addition, Apple is no longer the world's richest company. Its market capitalization is about $378.3 billion.
Exxon Mobil's (XOM) market cap is now $384.8 billion, based on a Wednesday closing price of $86.08.
The immediate cause for Apple's decline was a report from Cirrus Logic (CRUS) that it had had to establish a reserve for unsold audio chips. Cirrus supplies audio chips to the iPhone and iPad. Cirrus shares closed down $3.36 to $18.05. Jefferies analyst Peter Misek told Bloomberg News the Cirrus report is an indicator of demand for iPhones and iPads.
Apple's stock woes on Wednesday were important for three reasons:
- The shares broke below $419, a price level that had acted as a strong support starting on March 4.
- Falling below $400 breached an important psychological level. Analysts have been saying a close below $400 could signal more trouble ahead for the stock market.
- Apple was the biggest reason for the slumps in the Nasdaq Composite Index ($COMPX), the Nasdaq-100 Index ($NDX) and the Standard & Poor's 500 ($INX). The Nasdaq was down 60 points to 3,205. The Nasdaq-100 was off 56 points to 2,777, and the S&P 500 fell 23 points to 1,552.
Apple represents about 12% of the Nasdaq-100's market capitalization and 8% of the total market cap of the Nasdaq as well as just under 3% of the S&P 500's. Microsoft (MSFT) represents 7.3% of the Nasdaq-100's market cap and 4.8% of the Nasdaq's. (Microsoft is the publisher of MSN Money.)
The Nasdaq-100 tracks 100 of the largest non-financial Nasdaq companies
Apple's stock price has been a major concern for company officials, especially CEO Tim Cook, who replaced Steve Jobs before the Apple co-founder passed away in September 2011.
The stock is down more than 43% from its intraday peak of $705.07 on Sept. 21, 2012 and its closing peak of $702.10, set on Sept. 19.
Analysts and critics have charged that the company has lost momentum to Samsung (SSNLF), which has seen sales of its Galaxy family of smart phone, soar. The phones use the Android operating developed by Google (GOOG).
Google didn't have much of a day either. Shares were down $10.81 to $782.56. They're down 7.3% since hitting an intraday high of $844 on March 6.
Apple isn't a member of the Dow Jones Industrial Average ($INDU), which closed down 138 points to 14,619. It was the third day the Dow had experienced a change of more than 100 points. The blue chips had been down as many as 196 points.
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