The PowerShares QQQ Trust (QQQ) and a roster of other tech-sector ETFs were trending lower Thursday as Apple stocks slipped around 10 percent on disappointing iPhone sales.
The Apple sell-off was sharp enough early in the session to trigger stock exchange circuit breakers, which are designed to manage selling pressure of stocks in decline. The Cupertino, Calif.-based company’s latest earnings report showed holiday-period iPhone sales didn’t meet analyst expectations, fueling concerns that the tech giant might be losing its dominance in the smartphone space.
The hit on the firm’s stock price, which came despite record quarterly earnings of around $13.1 billion, added to what is now a 34 percent decline since the company’s shares were at a 52-week high four months ago. Apple’s shares, which were trading at $461.20 this morning, closed at $702.10 on Sept. 19 of last year.
Apple is a major holding in many tech ETFs, though it’s worth noting that different funds have different Apple weightings, which means they are being affected quite differently by the slide in the tech bellwether’s shares.
The most conspicuous of those is the $33 billion QQQ, which tracks the Nasdaq-100 Index and allocates more than 15 percent of its portfolio to Apple, making the company the fund’s largest holding. The fund was trading 0.65 percent lower Thursday, and has declined 5 percent in the same four-month period since Apple stocks peaked.
Interestingly, the First Trust Nasdaq-100 Equal Weighted Index (QQEW), a fund that tracks the equal weighted Nasdaq-100 index, was one of the only tech ETFs to be beating the trend. QQEW was in fact tagging on gains of nearly 1 percent Thursday, forging new record highs as it neared $28 a share. The fund, however, is small, with only $95 million in assets.
The broad stock market also seemed relatively un-phased by Apple’s troubles. The S'P 500, in fact, hit a five-year high in early trade, crossing through 1,500 for the first time since December 2007.
The SPDR S'P 500 ETF (SPY), the largest ETF in the world, with some $125 billion in assets, was rising 0.4 percent Thursday to near $150 a share, its highest level since October 2007.
The fund has rallied 102.7 percent in four years since it bottomed in February 2009 around $74 a share. SPY allocates some 3.5 percent to Apple.
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