Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Apple's shares swallow biggest loss in 4 years

Dec 06 2012, 11:53 IST
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Apple Inc  shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.  (Reuters) Apple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market. (Reuters)
SummaryApple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.

first three days on the market. Some analysts suggested that investors also sold shares of Apple amid uncertainty over ongoing fiscal negotiations in Washington. If no agreement is reached on the issue, higher tax rates on dividends and capital gains are possible in 2013. Investors who had hoped for a special dividend this year, as many other corporations have announced on expectations of higher

tax rates next year, may be disappointed as time is running out. "If you were expecting a special dividend by year end, that's less likely to happen because its Dec. 5," said Colin Gillis, an analyst with BGC Partners.

The fear of higher taxes on capital gains also has prompted some investors to lock in profits now, particularly on a stock like Apple, which has posted gains of at least 25 percent forfour consecutive years.

"Depending on what happens with the (U.S. Fiscal negotiations), rates could rise next year or they could stay the

same," said Battle, of Performance Trust Capital. "They will not be lower, so if you're an investor who has seen gains in Apple, it is better to take those gains this year rather than next." Tax selling "can take a life of its own," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

"Some taxable investors take the gains, that creates some negative momentum, institutional investors are heavily weighted the stock and reduce exposure."

Some market participants also cited reports by media including CNBC, which Reuters could not confirm, that margin requirements on the trading of Apple stock had been raised by at least one clearing firm.

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