Apple (Nasdaq: AAPL)
The stock market today is flat in morning trading with investors focused on earnings and gold this week.
Today's stock market follows a mild day Monday as investors awaited earnings from Netflix Inc. (Nasdaq: NFLX) after the close, and a flood of earnings later in the week. But the S&P 500 Index still managed to eke out another record close
What's Spooking Investors in the Stock Market Today
The stock market today is down more than 200 points as China fears trigger a global sell off.
In mid-morning trading, the Dow dived 205.75, 1.39%, to 14,593.65. The S&P 500 slumped 25.78, 1.62%, to 1,566.65. The Nasdaq slid 50.78, 1.51%, to 3,306.47. The Dow and S&P are now off some 5% and 6% respectively from their all-time highs reached earlier this year.
Asian markets were clobbered Monday and European markets melted on increasing fears of a liquidity crunch in China. Major Euro indexes, off roughly 10% from their April highs, are officially in bear territory.
Today's moves continue the rollercoaster ride U.S. equities were on last week, with the Dow shedding 560 points, or 3.66%, over Wednesday and Thursday.
The blue-chip benchmark finished at 14,799.40, down 1.8% for the week, its worst week since April 19. The S&P 500 fared worse, slumping 2.1% last week to end at 1,592.43. The Nasdaq ended at 3,357.25, for a weekly loss of 1.9%.
The VIX, or the CBOE Volatility Index, soared 10.2% last week, ending at 19. Wall Street's "fear gauge" has risen four of the past five weeks, ever since Fed Chief Ben Bernanke's first mumblings about a probable winding down of stimulus.
Monday morning, the VIX jumped 2.14, or 11.23%, to 21.04, its highest level of the year.
Markets were goosed Friday after The Wall Street Journal's Fed watcher Jon Hilsenrath wrote that investors may be misreading optimistic messages sent by the Fed Chairman Ben Bernanke as hawkish.
Also, Goldman Sachs (NYSE: GS) analysts said their top recommendation for 2013 is still to buy stocks and sell bonds.
"We continue to expect the index [S&P] will close the year at 1,750, a rise of approximately 10% from today's top level. However, median historical drawdown episodes suggest at some point during the next six-months that the S&P may decline to mid-1,500s before resounding to our year-end target," Goldman's analysts wrote.
Further giving stocks a lift was a bullish statement to CNBC from renowned hedge fund manager David Tepper, founder of Appaloosa Management: "All the concerns in the markets is because the Fed sees the economy stronger in the future. In fact, their forecast shows that they will wait until a lower unemployment rate (closer to 6% than 6.5) to raise interest rates. So they are a bit easier on the front...I obviously thought they should start to taper. [But] the bottom line when the dust settles [is that the] only one place to be [is] stocks."
Is Apple's "Next Big Thing" Vaporware?
In Silicon Valley, there's a term for products that a company makes bold statements about and always seem on the cusp of launching but never quite materialize - vaporware.
And believe me, over the decades there have been more vaporware companies than real ones.
What's more, it's not uncommon for once-respected names to become vaporware makers over time.
One of the big questions now is, with the death of visionary Steve Jobs, the growing Android base, and the next generation in smartphones, is the "Next Big Thing" for Apple Inc. (Nasdaq: AAPL) nothing more than vaporware?
For investors slammed by the stock's 39% decline from its 2012 high, the question is hardly rhetorical.
Today, I'm going to explore what's in store for the whales of the tech space and tell you where I stand on whether their visions will be actualized or vaporized.
The Apple Sell-Off is Just Beginning
I've made the case several times that Apple Inc. (Nasdaq: AAPL) was over-cooked, most recently last fall when the company was flirting with $700 a share.
Each time I did I was taken to the woodshed by the legions of Apple fans who couldn't reconcile their passion with their profits.
iHere we go again...
Following earnings that "beat" and revenue that fell short, the company dropped $48 billion, or roughly 10%, in afterhours trading on Wednesday. And still more on Thursday in early trading.
I think this is just the beginning of a protracted sell- off and my argument really isn't that fancy. In fact, it comes down to two very simple points:
Apple iPhone 5 Demand Alone Will Push Stock Price Past $800
If the Apple iPhone 5 turns out to be the blockbuster product that nearly everyone expects, it should easily carry the company's stock to $800 and beyond.
The long-anticipated next-generation iPhone is expected to debut at an Apple Media Event Sept. 12 and go on sale Sept. 21.
Rumored improvements such as a bigger 4-inch screen and 4G LTE network compatibility have heightened consumer anticipation, even slowing sales of the current iPhone 4S.
A recent survey of more than 4,000 American consumers by ChangeWave Research indicated that many can't wait to give their money to Apple Inc. (Nasdaq: AAPL).
"Advance demand for the iPhone 5 is strikingly higher than we've seen for any previous iPhone model," Paul Carton, ChangeWave's vice president of research, told Computerworld.
In addition, extraordinarily positive guidance from several iPhone component suppliers hints that Apple has ramped up production like never before. Cirrus Logic (Nasdaq: CRUS) forecast a 70% sales increase for the current quarter. Omnivision (Nasdaq: OVTI) said it expected revenue to jump 38%-50%.
[ppopup id="70925"]Six ways you can make money as the masses flock to Apple for the iPhone 5. [/ppopup]
And with Apple's huge patent case victory over Samsung two weeks ago casting a cloud over the iPhone's Android-based competitors, conditions are ideal for a huge iPhone 5 launch.
In a note last month, Piper Jaffray analyst Gene Munster, predicted the Apple iPhone 5 would be "the largest consumer electronics product upgrade in history." He forecast the iPhone 5 will sell 6-10 million units within its first 10 days.
Another analyst, Horace Dediu of Asymco, has projected iPhone 5 sales of about 170 million units over the next year, which would beat first-year sales of the iPhone 4S by about 70%.
Given that the iPhone contributes more than half of Apple's profits, any large increase in iPhone sales will deliver a mammoth boost to the bottom line. And those rapidly rising profits will keep pushing AAPL higher.
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5 Reasons Apple (Nasdaq: AAPL) Stock Hit a New All-Time High
Just when it looked like the Apple Inc. (Nasdaq: AAPL) success story had taken a detour, Apple stock suddenly hits a new all-time high.
AAPL shot past its previous intraday high record of $644 by reaching $648.19 during Friday's session. The close of $648.11 easily broke the $636.23 record closing price set on April 9.
Today (Monday) Apple stock is up more than 1% in early trading, reaching an intraday high of $656.35.
That's hardly what many investors expected after Apple reported on July 24 that it missed on its June quarter earnings and offered weak guidance for the current quarter.
After that Apple stock dipped into the $570 range several times before quietly starting its climb back to its previous high.
Since those lows of late July, AAPL has soared 12% -- more than twice the rise of the Standard & Poor's 500 index and almost triple the performance of the Dow Jones Industrial Average.
How can this be? Why are investors so high on a company that hasn't really done anything spectacular lately?
How the Apple (Nasdaq: AAPL) iPad Mini Will Crush Tablet Rivals
If Apple Inc. (Nasdaq: AAPL) does unveil an iPad Mini this fall - and fresh reports from both Bloomberg News and The Wall Street Journal indicate it will - the new device could help Apple lock up the tablet market for years.
The iPad Mini, as tech pundits are calling it, could debut as early as October. It's thought to have a 7.85-inch screen, significantly smaller than the 9.7-inch display of the three iPad models released so far.
Such a product would compete directly with Amazon.com's (Nasdaq: AMZN) Kindle Fire as well as the just-announced Nexus 7 from Google Inc. (Nasdaq: GOOG). Both sport 7-inch screens and a $199 price tag aimed at buyers unwilling to pay $499 or more for a new iPad (or $399 for an older iPad 2).
"It would be the competitors' worst nightmare," Shaw Wu, an analyst at Sterne Agee & Leach Inc., told Bloomberg. "The ball is in Apple's court."
There was no word on what the iPad Mini might cost, but in a note yesterday (Thursday) Topeka Capital analyst Brian White estimated a range of $250-$300.
"That would lure certain consumers away from these competitors with an overall better experience that includes a much more robust ecosystem," White said.
Apple's desire for generous profit margins will keep it from pricing an iPad Mini at $199. Both the Amazon Kindle and Nexus 7 lose money at $199.
With its impressive ecosystem, Apple can get away with charging more for a similar product. That ecosystem, built upon the iOS platform that runs all of the Cupertino, CA company's mobile devices, includes the iCloud remote storage service as well as 225,000 apps designed just for the iPad.
"This isn't like the old days, when it cost thousands of dollars more to buy an Apple product," Wu said. "Fifty or a hundred bucks wouldn't be enough to make someone switch."
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Apple Inc. (Nasdaq: AAPL): Winners and Losers from WWDC
When Apple Inc. (Nasdaq: AAPL) announces new products or updates to existing products, it sends shock waves out into the tech world.
Apple's ability to alter the fate of other tech companies was on full display at the June 11 WWDC 2012 keynote.
Apple's enormous revenue - about $160 billion annually and rising - means generous and steady profits for its partners and suppliers. A new deal with Apple often gives a tech company's stock a nice pop.
But it also explains why tech companies dread losing a relationship with Apple.
Investors that may not want to buy Apple often use the Cupertino, CA company's partners as proxies. It can be a profitable strategy, but a risky one - Apple often drops partners with little or no warning.
Apple's announcements at WWDC created a fresh set of winners and losers. Let's have a look at what happened:
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