Most Stocks, ETFs Shake Off Apple Crash

Apple Computer (Nasdaq:AAPL) tumbled 12.53% on negative reaction to yesterday’s earnings report, dragging the stock to $450.50, down 35.8% from its September high of $702.

However, most major indexes managed to shake off the carnage with the Dow Jones Industrial Average (DIA) gaining 0.33%, the S&P 500 (SPY) finishing flat and the Russell 2000 (IWM) gaining 0.39%. The Nasdaq 100, (QQQ) however, was unable to escape Apple’s downdraft as the index dropped 1.4%.

The S&P 500 challenged the psychologically and technically important 1500 level, climbing to a high of 1502 during the trading day before falling back below that level into the close.

The S&P 500 has been here twice before, in 2000 and 2007, and both times failed to move much higher with significant bear market declines ensuing shortly thereafter.

In 2000, the S&P 500 peaked at approximately 1522 in March, 2000, and then fell to a low of 768 in October, 2002, a decline of approximately 50% now fondly known as the “tech wreck.” In October, 2007, the S&P 500 peaked in October at 1565 and then fell to 666 by March, 2008, a bear market decline of more than 50% that we now call the “Great Recession.”

The S&P 500 is up 4.8% year to date and current action after the recent breakout is similar to previous major breakouts for the index.

Economic reports were mostly positive today with an upbeat PMI reports from the U.S. Europe and China.First time unemployment claims for the week fell to 330,000, down from last week’s 335,000 and beating expectations. Read 3 Positive Economic Reports On Thursday.

December leading economic indicators rose 0.5% from last month’s 0.0% reading.But Apple (Nasdaq:AAPL) was the big news since it is the biggest company in the world and the 900 pound gorilla in U.S. stock indexes, composing roughly 10% of the Nasdaq and more than 3% of the S&P 500 Why Apple Is Getting Hammered: Could It Fall 60% Again?.

Furthermore, Apple (AAPL) is a darling of mutual funds and hedge funds and so action in the company’s stock ripples far and wide.

After the close, Microsoft (MSFT) reported earnings that met expectations on sales that were slightly lower than expected, and Starbucks (SBUX) checked in with a well received report.

Netflix (NFLX) came in at the opposite end of the spectrum from Apple with a gain of 42.2%.

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