Today: Apple (AAPL) takes another large tumble on wall Street following an unimpressive iPhone 5 launch in China. Also: "Fiscal cliff" worries continue to hurt Wall Street; Facebook and SolarCity fall.
Apple hits lowest point since February as analysts fret about sales
Apple stock closed at its lowest price since February on Friday, as concerns about the company's sales of iPhones and iPads overshadowed the debut of the iPhone 5 in China to send the stock down another 3.8 percent.
Apple stock has been on a rapid decline since the iPhone 5 debuted on Sept. 21, the day Apple last hit an all-time high at $705.07. However, concerns about iPhone 5 production falling short of demand, the company's failed Apple Maps launch, and a massive executive shake-up combined to send the shares to "bear market" territory. While it seems any dips from those issues should have ceased, Apple's stock has continued to fall, leading to a host of possible reasons from analysts and pundits.
Friday's decline seems a bit more straightforward, as two respected analysis firms issued reports that doubted Apple's future sales of its popular gadgets. UBS analyst Steve Milunovich issued a report Thursday night that cut Apple projections across the board -- iPhone and iPad sales, earnings and price target. Jeffries analysts concurred, saying that their supplier checks showed Apple was ordering fewer iPhone components, signaling it expects a drawdown in demand and supply.
Milunovich reported that his sources say the iPhone 5 will not do as well in China as the iPhone 4S, and reports of small lines -- some consisting of just two people and a snowman -- at Apple's iPhone 5 launch seemed to back that up. The Wall Street Journal called it "arguably the least eventful launch of an Apple device in the company's four-year history in the Chinese capital."
Enthusiasm could be muted for the iPhone 5 as long as it fails to complete a deal with China Mobile, the country's largest carrier.
"Apple's market share declined because of the transition between the iPhone 4S and 5. Their market share will recover (with the iPhone 5), but if you don't have China Mobile, the significant market share gains will be very difficult," Huang Leping, a Nomura analyst in Hong Kong, told Reuters earlier this week.
Even Apple's suppliers felt the pain after Friday's reports: Reuters reported declines in the stocks of Jabil Circuit, Qualcomm, Skyworks Solutions, TriQuint Semiconductor, Avago Technologies and Cirrus Logic.
Apple shares closed at $509.79, keeping the company's market capitalization below $500 billion at $479.6 billion.
Stock indexes struggle as investors continue to wait for 'fiscal cliff' compromise
Apple's sharp drop helped keep stock indexes from advancing, as the outsized importance of the world's most valuable company damaged the Nasdaq and Standard & Poor's 500. Other stocks failed to do much better, however, as the Dow Jones, which doesn't include Apple in its index, also dropped Friday.
Investors continued to fret about the "fiscal cliff," a series of tax hikes and spending cuts scheduled to take effect in the new year if Congress and the president cannot agree on a new solution. With each day that passes, the chance of a compromise in 2012 seems less likely, leaving Wall Street wondering what will happen.
"We're faced with uncertainty ... and that's going to continue now into January. It basically puts everybody on hold and (you) just have the markets kind of thrash around," Larry Peruzzi, senior equity trader at Cabrera Capital Markets, told Reuters.
Facebook takes a big dive, SolarCity dips after impressive debut
Silicon Valley tech stocks beyond Apple were also not popping Friday, as the SV150 index of the region's largest technology companies descended more than the three major U.S, indexes, with a 1 percent decline.
Facebook decreased a whopping 5.1 percent, though there seemed to be little impetus for the drop, as investors are growing more bullish on the Menlo Park social network. San Mateo's SolarCity fell 0.6 percent one day after a huge pop in its first day of public trading following its important cleantech initial public offering.
On the positive side, Adobe (ADBE) climbed 5.7 percent after the San Jose software maker announced profits that beat expectations as it switches to a subscription model, and Hewlett-Packard (HPQ) continued its recent strong run with a 1.7 percent gain.
Silicon Valley tech stocks
Up: Adobe, SunPower (SPWRA), HP, Palo Alto Networks, Yahoo (YHOO), VMware, Splunk, Juniper, Oracle (ORCL), Jive, LinkedIn, Netflix (NFLX), Symantec, Cisco (CSCO), Tesla, Nvidia, Workday, Electronic Arts (ERTS), Intuit (INTU), Intel
The tech-heavy Nasdaq composite index: Down 20.83, or 0.7 percent, to 2,971.33
The blue chip Dow Jones industrial average: Down 35.71, or 0.27 percent, to 13,135.01
And the widely watched Standard & Poor's 500 index: Down 5.87, or 0.41 percent, to 1,413.58
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.