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Apple Bear Market Pulls Down Nasdaq, Tech ETFs


Apple (AAPL) shares tumbling more than 20% from the record high and into a bear market has hurt Nasdaq and technology ETFs that have large stakes in the Wall Street darling.

Apple traded as low as $541.19 a share on Thursday, down about 23% from the all-time high of $705.07 reached in September.

The stock is the largest holding in PowerShares QQQ (QQQ) at nearly 18% of the Nasdaq-100 fund. QQQ has been trailing the overall market lately with Apple leading the way down.

The tech-heavy ETF is off about 9% since the latest 52-week high in September. Meanwhile, SPDR S&P 500 (SPY) is down 6% since its September peak.

“Apple shares, battered by a combination of disappointing product launches, management turmoil and competitive concerns, have entered bear market territory,” Eric Savitz at Forbes wrote Wednesday. “Combine that with a stock that had taken off like a rocket – the stock even at this level is up 39% for the year to date – and you have the formula for the big sell-off we’ve seen.”

The pullback in Apple and the overall tech sector has caused some investors to flee QQQ, the Nasdaq-100 ETF. Since the end of September, QQQ has seen net outflows of $2.3 billion, according to IndexUniverse. Only SPY has seen heavier selling during the period with outflows of $6.5 billion.

QQQ has fallen below the 200-day exponential moving average.

PowerShares QQQ

Full disclosure: Tom Lydon’s clients own AAPL, QQQ and SPY.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.