Apple, Google Continue April 2012 Correction Before Earnings, Europe Headline Risk Fades:
Apple helped increase short term negative technology sentiment this week as it continued its slide further into correction territory. We believed Apple was firmly in correction mode on April 16, 2012 and the company’s shares slid further beneath recent lows today topping out at $573 in trading today. Apple could reach new highs in the future but the downward trend is has been strong in the last few days.
Apple wasn’t the only stock to loose luster, Google fell beneath the $600 mark this week after reporting first quarter 2012 earnings and closed down today by nearly $4 to $596. The breakdown of these stocks which weigh heavily on the shares of the NASDAQ took the rest of technology down with it and financials seemed like a safe haven in comparison.
Financial stocks held firm in the face of a marginal week for the overall market and some skepticism about Apple’s upcoming earnings on Tuesday has increased in broader market search data as well as social media news.
Options expirations today made stock market movements choppy this week and next week will be an opportunity for bargain hunters to see if U.S. equities can make a comeback and begin the long-run rally after the current correction. Technology has run up since August 2011 and there may be new sector leaders in the interim period until tech as well as small caps get more attention from bulls. Housing stocks also faired well this week with the XHB holding up steadily while the NASDAQ was down around 1.2 percent and financial stocks performed slightly better. This is actually good news to us that the financials didn’t lead the market down and sector rotation out of high flyers is occurring. European headline risk faded towards the end of the week as trades focused on U.S. company earnings.