Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Apple iPad sends stock down - then up

chart_apple_stock2.top.gifBy Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- The debut on Wednesday of Apple's long-awaited tablet sent the company's stock on a wild ride.

Apple shares fell 4% immediately after CEO Steve Jobs unveiled the Apple iPad, a touch-screen tablet computer that runs apps from the iTunes store and boasts a 10-hour battery life.

But shares recovered a little over an hour later and rose 1% after Jobs announced that prices would start at $499.

The volume of trading was more than three times the normal daily average, reaching 61 million versus the typical daily average of 19.5 million.

"What this device does is extraordinary -- the best browsing experience you've ever had. Way better than a laptop," Jobs said as an invite-only event in San Francisco got underway.

But about 45 minutes into the event, the market was not impressed. Shares of Apple (AAPL, Fortune 500) slid as low as $199.53 before regaining some ground. By 2:25 p.m. ET, shares were up 1% and managed to hold those gains, ending the day at $207.88.

Historically, the company's stock price has lulled or sold off slightly immediately following product releases. Analysts have a median price target of $250 for Apple's stock.

Shares had been on a tear since the stock market's nadir in March 2009. On Monday, Apple reported a record sales rise of 32% to $15.7 billion in the first fiscal quarter of 2010, well above analyst forecasts. That marked the second straight quarter of record sales.

But some analysts caution that Apple shares could stumble, as the iPhone may start to see sales level off. Others are skeptical about the consumer appeal of a tablet, citing portability concerns and asking whether the device is anything more than a gigantic iPhone.

But Carl Howe, director consumer research at industry analysis firm Yankee Group, said Apple is able to post high earnings and should continue to do so because of three factors: unique devices, quality applications/services, and productivity.

"[Apple has] a have a great track record for making you want -- and buy -- things you thought you didn't need," Howe said. To top of page

Index Last Change % Change
Dow 17,891.16 117.52 0.66%
Nasdaq 4,817.59 42.24 0.88%
S&P 500 2,081.43 16.13 0.78%
Treasuries 1.86 0.05 2.53%
Data as of 5:18am ET
Company Price Change % Change
Bank of America Corp... 14.77 0.21 1.44%
Ford Motor Co 13.62 0.06 0.44%
Apple Inc 93.64 -0.10 -0.11%
Freeport-McMoRan Inc... 13.55 -0.45 -3.21%
Frontier Communicati... 5.44 -0.12 -2.16%
Data as of May 2
Sponsors

Sections

Johnson & Johnson has suffered a second costly court defeat over claims its talcum powder caused cancer, and that may be only the beginning. More

It's getting worse for Puerto Rico. The island defaulted on $422 million in bonds related to its Government Development Bank on Monday. Congress is currently debating an aid package for the island. More

Tech leaders Apple, Alphabet and Microsoft all disappointed Wall Street with their latest earnings reports. And that's dragged the Nasdaq back near correction territory. Is this the beginning of another huge pullback or an overreaction? More

Visa says new software will allow consumers to check out with chip cards as fast as swiping a card with magnetic strip. More