Apple shares lead tech sector lower
Even Apple Inc. needs a rest sometimes.
The technology behemoth suffered its fifth-straight losing session Monday, the first time it has endured that fate since early October.
On a bad day for tech stocks but a solid one for the rest of the market, Apple fell $25.10, or 4.2%, to $580.13. It’s now down 8.8% from its record close above $636 a week ago.
That contrasted with the Dow Jones industrial average, which rebounded from its worst week of the year. Paced by better-than-expected retail sales, the blue-chip index rose 71.82 points, or 0.6%, to 12,921.41.
The 0.8% gain in retail activity last month cheered investors, who have been worrying about the prospects for consumer spending power in the face of rising energy costs and a still-soft jobs market.
However, some analysts believe the market could remain on unsure footing in coming weeks as it digests its powerful first-quarter gains.
In an about-face from its role leading the market up for most of the year, the tech sector’s decline weighed on the Standard & Poor’s 500 index and the Nasdaq composite index. The S&P fell fractionally, while the Nasdaq dropped below 3,000, falling 22.93 points, or 0.8%, to 2,988.40.
Stemming mainly from a drop in Apple and Google Inc. shares, tech was the worst performing sector in the S&P, sagging 1.2%. Google gave up $18.53, or 3%, to $606.07, although some other large tech companies, including Microsoft Corp. and Intel Corp., managed gains.
Analysts struggled to explain what drove Apple down, with theories that included rumors about the launch of a cheaper iPad, which could cut into earnings, and talk that cellphone companies could reduce their subsidies to the iPhone.
Some market watchers blamed simple gravity. The weakening of Apple shares last week may have prompted some investors to cash in their chips rather than risk giving back more of their gains.
Apple had surged 75% from late November, powering through the $400, $500 and $600 milestones in that span. A handful of analysts speculated recently that Apple might pierce $1,000.
“You need to put these things in perspective,” said John Bollinger, head of Bollinger Capital Management in Manhattan Beach. “People have racked up some really big gains in Apple and they get a little nervous. This is classic profit-taking.”
Apple is still up 43% this year.
The Dow overcame a rise in yields on Spanish government bonds, which have climbed steadily in the last six weeks on renewed fears about the European economy and the ability of countries such as Spain and Italy to meet their hefty debt payments.
Yields on 10-year Spanish government debt, which had fallen below 5% early this year, rose to 6.07%, up from 5.98% on Friday. The 10-year yield has risen above 6% three times in the last year, hitting a peak of 6.70% late last year.
