Why Are the Markets Ignoring Apple’s Fall?
Apple’s (NASDAQ:AAPL) stock dropped 2.36 percent on Friday to close at $439.85, a whole 12.03 percent below the level it was at when the week began. However, the overall bull market kept its momentum, with the Standard & Poor’s 500 index closing above 1,500 for the first time since December 2007 and the Dow Jones industrial average ending fewer than 30 points from breaking 14,000.
The broader Wilshire 5000 index, which tracks all stocks available for trade, closed just below a record high it had set on Thursday and marked a $10 trillion stock value gain in the bull market.
So how is it that while Apple, now the second most valuable company in the U.S., keeps declining, the broader markets seem unaffected? According to Barron’s Randall W. Forsyth, the easiest explanation comes from the “vantage point of an Apple shareholder.”
While those investors in the company who bought in when the shares were near their peak of $702.10 in September are undoubtedly facing losses, the decline in Apple’s stock price does not affect the company’s overall financial viability at all, Forsyth wrote.