Apple (NASDAQ: AAPL) shares tanked again today.
The stock dropped another 11 points to fall to a nine-month low of $526 a share. It’s now down 11% in the last two months since briefly topping an all-time high of $700 a share in the third week of September.
As usual, Apple’s decline has dragged the Nasdaq down with it. The tech-heavy index dropped another 0.6% today. Since September 21, the index is down 10.9% – a drop-off that is almost identical to Apple’s.
It’s not secret as to why. By itself, Apple comprises roughly 13% of the Nasdaq. Much of the time, as it goes, so goes the Nasdaq.
Apple is also a major driver of the benchmark S&P 500, albeit to a lesser extent. So Apple’s slump has played a significant role in the S&P’s 7.5% drop-off since late September.
Election uncertainty and fiscal cliff fear have certainly had a lot to do with stocks’ two-month slump. But an Apple turnaround would go a long way toward curing what’s currently ailing the market.
All technical indicators point to an Apple rally – and soon. This is the most oversold the world’s largest stock has been since December 2008. It’s also trading at just nine times forward earnings.
Holiday shopping season should help. Apple’s iPhones and iPads are always among the best sellers this time of year. With a new iPhone and iPad Mini out, that trend should continue.
There are plenty of reasons – both technical and practical – why Apple should bounce back soon. Once it does, expect the market to rally along with it.