Apple Inc. Stock Turns Volatile Suddenly

Updated on

Apple Inc. (NASDAQ:AAPL) stock began to recover a bit after a sudden dip in early trading this morning, but it’s unclear exactly why that dip happened. Bloomberg News reports that the decline has been the biggest intra-day slump since Jan. 28, while Reuters reports that Apple shares saw the biggest one-minute trading volume since Oct. 29.

Apple Inc. AAPL

Technology stocks slip

Today’s pullback comes after Apple’s multiple hit a three-year high last week. One possibility for why Apple shares pulled back this morning could be part of a broader sell-off in technology stocks. Twitter Inc (NYSE:TWTR) fell by as much as 5%, while shares of Facebook Inc (NASDAQ:FB) slipped by more than 2%. Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) fell by more than 1%, while LinkedIn Corp (NYSE:LNKD) slipped by as much as 4%

Other possibilities for why Apple slipped

Street Insider suggests a couple of possibilities for why Apple stock took a beating this morning. The website states that it’s “unclear if the downside action was related to a fat finger trade, algorithmic trading or something else.”

Additionally, the report points to a downgrade from Morgan Stanley for the broader technology sector. Analysts at the firm downgraded the entire sector from Market-Weight to Overweight and cut its stake in Apple by 1%. The downgrade could be why the broader technology sector is slipping this morning.

This morning there are also concerns about how successful the Apple Watch will be next year. Forbes contributor Anthony Wing Kosner said on Sunday that the smartwatch might be too complicated to appeal to the mass consumer device market. Apple updated the Apple Watch feature page to highlight some specialized functions. Additionally, The Verge editor-in-chief Nilay Patel said the Apple Watch comes with at least 15 interactions required to operated it, making the smartwatch potentially too difficult for the average consumer to want to mess with.

Of course these factors alone still don’t really explain the early morning decline in Apple’s share price.

China manufacturing as a reflection on Apple?

Bloomberg reports a decline in China’s official factory index. The index slipped to 50.3 for last month, coming up just shy of economists’ estimate of 50.5. HSBC Holdings Plc and Markit Economics have a private factory gauge which measures at 50, putting it exactly between contraction and expansion. U.S. manufacturing expanded more quickly in November than economists had been expecting, however.

Last month the factory index from the Institute for Supply Management didn’t change much, coming in at 58.7, which was the second-best level since April 2011, according to Bloomberg. That’s compared to 59 in October. The metric was also good enough to surpass the average estimate of the 80 economists Bloomberg surveyed.

The National Retail Federation also indicated that consumers in the U.S. spent about 11% less this year than they did last year through Nov. 30. This is the second consecutive year in which sales for Thanksgiving shopping have declined.

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