Apple Shares Rolling Down

Rolling Down of Apple's Share

On Jan. 23, and Apple shareholders were this news very disgusting for them as company forecast on the current quarter came. Apple stock was having its biggest-ever one-day decline in dollar terms and Chief Executive Steve Jobs felt a need to reassure the troops. Jobs wrote in an e-mail to employees. "Our stock is being knocked about by factors a lot larger than ourselves."

Propelled by seemingly unpunctual demand for iPods, iPhones, and Macs, Apple shares surged to a record 199.83 on Dec. 28, after starting the year at 83.80 on Jan. 3. Analysts suggested price targets will go to great boom alsoPiper Jaffray's (PJC) Gene Munster said Apple stock could reach $250 a share in 2008. By the end of 2007, Apple's market value had swelled by $100 billion.

Disaster caused by letting down the Consumer Confidence

The descent can be pinned on worsening consumer sentiment and questions over how big an impact the resulting decline in discretionary spending will have on Apple. Some investors are betting Apple will bear a bigger brunt than other tech bellwethers. The concern was fueled Jan. 22, when Apple issued a sales forecast for the current quarter that failed to match analysts' forecasts, and it's only been heightened by economic reports and surveys since then.

Fear that the economy is headed for recession, along with higher prices on items like groceries and gasoline, is causing consumers to rein in spending on nonessential items. A January survey by Discover Financial Services (DFS) found that 70% of consumers think the economy is in decline, and nearly half say they plan to make fewer discretionary purchases in February. "The first place they cut back is on entertainment purchases, and the second is on home improvements," says Discover's Margo Georgiadis. She says iPods and iPhones fit the first category and computers the second. A study released Feb. 8 by Royal Bank of Canada (RY) showed U.S. consumer confidence at its lowest level in the six years since the bank's yardstick was created.

Lagging Other Tech Stocks

Even persons will find it great difficulty tomay no purchase digital music players and other Apple products . On Feb. 7, the Federal Reserve said consumer credit rose by $4.5 billion in December, compared with the $8 billion expected by Wall Street analysts, and down from an average monthly rate of $14.3 billion in the third quarter.