Apple shares flirt with correction territory

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SAN FRANCISCO (Reuters) – Shares of Apple Inc dipped on Monday and flirted with correction territory following a report that the company had told suppliers to scale back shipments of parts for its upcoming iPhone X.

Digitimes, citing unnamed sources, reported that Apple suppliers were shipping just 40 percent of the components originally ordered for the premium phone, which goes on sale in early November.

That added to concerns on Wall Street about demand for Apple’s new devices after the launch on Friday of the iPhone 8, a less expensive model than the iPhone X, drew smaller crowds than previous launches.

Apple did not immediately respond to a request for comment.

Some investors saw the tepid iPhone 8 debut as a sign that customers were holding out for the iPhone X, which boasts an edge-to-edge display and will sell in the United States for $999.

Amid a broad selloff in technology shares on Monday, Apple’s stock was last down 0.7 percent. It earlier fell as much as 1.8 percent, bringing its loss since a record high on Sept. 1 to 9 percent.

Many investors define a correction as a 10 percent decline. A stock in correction may be viewed as either a buying opportunity or as likely to fall further.

“I’d buy Apple in this pullback,” said Wedbush trader Joel Kulina. “It’s a high-priced product but super high end.”

While the number of people queuing up outside Apple stores has dropped over the past several years with many buyers choosing to shop online, the weak turnout for the latest iPhone has partly been due to poor reviews.

Apple’s stock recently traded at 13.8 times expected earnings, its lowest valuation since February, according to Thomson Reuters Datastream.

Over the past two years, Apple’s average forward price-to-earnings ratio has been 12.6.