Photo: By lynxman on Flickr
Apple shares have under-performed the broader market over the last several days, spawning a host of theories from investors.Art Cashin, director of floor operations at UBS, presented two of the more plausible ideas in his morning note today.
The explanations deal with both a re-weighting by index funds and issues in the company’s product pipeline.
From his note:
One thesis advanced for the weakness in Apple was a reweighting. Texas Instruments was going to be included in the Nasdaq 100. That would mean that some (most) of the existing members would see their weightings reduced. Dipso Facto, as Muggs McGuinness might say, Apple, which is a dominant force in the index would see selling as its weighting was adjusted. OK. That makes sense, but they were some holes in the thesis. Other tech giants that would also see reduced weightings were not seeing similar selling. Microsoft and Intel both rallied.
If the reweighting thesis was flawed, what else could be weighing on Apple? There were vague claims about a software virus on the Mac system and equally vague suggestions of possible operating speed-bumps on the new iPads. We couldn’t find any credible affirmation of these.
At any rate, the Apple weakness weighed on both the S&P and the Nasdaq, while the Dow attempted to lead a rally. That left the markets mixed and struggling through mid-day.