Apple's Stock Price Analysis

Task 2 Continued

From Oct 29th to Nov 5th

According to Globe and Mail, the U.S. Federal Reserve announced that they will be purchasing $600 billion of U.S. government bonds, the fact that will drive the interest rate even down in order to boost spending and borrowing. The news had great positive effects on the stock market in general; most companies have seen their stocks rising during this week.

Investors’ utility in buying stocks should become more appealing than their utility in investing in GIC’s and Bonds since the interest rate has gone down. As a result Apple’s stock takes advantage of the good news and goes up by 5.37% from $300.98 to $317.13.

From Nov 5 th to Nov 12th

According to PR News Wire, Motorola Mobility, Inc. officially is suing Apple for the patent infringement of Apple’s iPhone, iTouch and certain Mac Computers. Motorola Mobility demanded that Apple should be investigated by the ITC and furthermore it issued an order requesting immediate cease of sales, advertising, and distribution of the infringed products. Motorola Inc. is also asking for a compensation for all past infringement.

Since we know that most investors are risk averse, news like this will trigger investors uncertainty which will lead to a decrease of Apple’ stock demand as investors might dump their stocks, the fact that will eventually lead to an increase the supply of Apple’s stock. When the supply surpasses demand, the price goes down.

As a result, Apple’s stock price takes a hit this week. It dropped 2.87% from $317.13 to $308.03. The volume was relatively high as it reaches 28 million.

From Nov 12 th to Nov 19th

The U.S stock market dropped 178.47 points, or 1.6%, to 11,023.5 this week because of Ireland’s debt crisis and also because of the speculations that china might increase interest rate. The uncertainty about the Euro zone had a huge effect on the global economy and accordingly makes investors sceptical about the economic recovery; the issue of risk...