Tech stocks lose significant ground in midday trading; Apple off 23% since July 27th

“Technology stocks lost significant ground by midday Thursday,” Dan Gallagher reports for MarketWatch.

“In midday action, the tech-heavy Nasdaq Composite Index fell 65 points, or 2.7%, to 2,393. The Morgan Stanley High Tech 35 Index slipped 16 points, or 2.6%, and the Philadelphia Semiconductor Index was down nearly 2%,” Gallagher reports.

“The losses mirrored those in the broader market, which retreated Thursday due to further worries of weakness in the mortgage and housing sectors,” Gallagher reports.

“PC makers Apple Inc. (AAPL: 113.78, -6.12, -5.1%) , Dell Inc. (DELL: 25.31, -0.99, -3.8%) and Hewlett-Packard Co. (HPQ: 44.20, -1.95, -4.2%) all lost ground,” Gallagher reports. “H-P is slated to report quarterly financial results after the closing bell.”

Full article here.

MacDailyNews Note: Since setting an all-time high of $148.92 on July 27th, 2007, Apple shares have been severely punished, losing $34.87, or 23.42%, to trade at $114.05 currently.

52 Comments

  1. All I know is that unemployment is lower than now when Clinton was around, so he can’t be all that bad. The entire dot bomb bust happened on Clinton’s watch too in case you’ve forgotten…

  2. What the hell does “weakness in the mortgage and housing sectors” have to do with the value of technology stock? Anyone selling Apple stock on worries about the housing market is a complete idiot.

    Fortunately we can take advantage of their stupidity buying Apple NOW.

  3. The Fed could stop this whole credit slaughter by dropping interest rates half a point now, not October or whenever, now. The Treasurer of the United States has spoken virtually nothing about the strength of our economy and is frozen like a deer in the headlights. The total lack of leadership at all levels of government combined with media driven panic has twisted and expanded a basically limited and now months old problem of substandard credit exposure in a small market segment into a major market crisis. Economists are the dung heap of professionals in the realm of finance. Have they ever ever ever gotten it right?

  4. Uh, sorry, but welfare reform and budget reform were BOTH a product of the Republican congress. Clinton simply went along for the ride and pretended that those were his babies. Sadly, morons like yourself play along.

    But I do agree that Bush is a crappy president. He spends like a motherf***er. That’s because he’s not a CONSERVATIVE. If we had a truly rock-ribbed conservative president AND conservative congress, that would be a kick ass government. Period. End of story.

  5. I’m with nuclear kid. We’ve been printing up so much damn money that is worthless the bottom was bound to drop out. This is probably the beginning. All China has to do is decide to reevaluate their currency….then where do we stand? I already sold all of my stock, putting it into physical gold and silver. That way if it does crash, I’ll be fine. If it doesn’t better for everyone. Rather safe than sorry.

    I can always buy apple back when everything bounces back.

  6. Galloway: The issue is not the housing market. The issue is the credit squeeze that started in mortgage-backed securities and since then has spread to the corporate debt market. AAPL is being sold, along with the rest of the market, to raise cash that otherwise might have been available in the capital markets.

    Marcos: The Federal Reserve’s job is to control inflation and manage growth, not bail out the financial markets. The Fed will not cut interest rates just because your brokerage account is suffering from a margin call.

    What the Fed has done is inject cash into the market to ensure sufficient liquidity for banks to meet their cash obligations.

    Today in particular, the Fed offered a 14-day repo (previous repos were all 1-3 days) that indicates a strong commitment by the Fed to provide or remove liquidity from the market, as needed, to ensure the Federal Funds Rate remains at the target 5.25%.

    (The Federal Funds Rate is the rate at which the Fed and large banks will make overnight loans to each other.)

    Bottom line: AAPL’s fundamentals have not changed, but the credit and liquidity risks in the corporate debt market has triggered a run on equities, and this has resulted in the widespread selling.

  7. Some thoughts on all this from Warren Buffet:

    At the bottom of the bear market in October 1974 a Forbes article interviewed Buffett. Buffett, for the first time in his life, made public prediction about the stock market.
    “How do you feel? Forbes asked.
    “Like an oversexed guy in a whorehouse. Now is the time to invest and get rich.”

    “The most common cause of low prices is pessimism-some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer.”
    – 1990 Chairman’s Letter to Shareholders

    “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”
    – lecturing to a group of students at Columbia University in New York. He was 21 years old.

    “If a business does well, the stock eventually follows.”

    “It’s only when the tide goes out that you learn who’s been swimming naked.”

    “The Stock Market is designed to transfer money from the Active to the Patient.”

    “Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”

  8. I don’t think anyone realizes how far reaching the mortgage/real estate situation will be. It’s not just about defaulted mortgages. Anytime you have a market where people who need to sell can’t, they will default. The subprime borrowers will default first because they don’t have alternative credit to sustain them. Grade A borrowers will default, too, they will just rely on unsecured credit to carry them until it runs out and then foreclose and file bankruptcy. This is starting to happen now. The results of all this is the tightening of credit which means that the borrowing ability that built the market to where it is is no longer. How will the market sustain itself? It probably won’t. As prices decline because new buyers can’t get loans, more and more will foreclose bringing prices down even further. This is ugly!!

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.