SAN FRANCISCO (MarketWatch) -- Apple Inc. shares fell to their lowest levels in more than 16 months Monday as two analysts cut their ratings on the Mac maker's stock due to a growing risk that consumer spending on high-end electronics is slowing down heading into the end of the year.

By the time the market closed, Apple's shares AAPL, -0.75% had fallen $22.98, or almost 18%, closing at $105.26. The stock has plunged nearly 40% over the past month on worries about slowing demand, as well as the technical issues that have plagued the launch of its 3G iPhone.

Before the opening bell, Kathryn Huberty of Morgan Stanley cut her rating on the stock to equal-weight from overweight. RBC Capital Markets analyst Mike Abramsky made a similar move, lowering his rating to sector perform from outperform.

In her research note, Huberty also lowered her 2009 earnings estimates for Apple, citing evidence that overall PC sales are slowing and that the only area of growth is the market for PCs that cost less than $1,000. Apple doesn't sell any of its laptop or desktop PCs for less than $1,000; its Mac mini computer starts at $599 but doesn't come with a keyboard, mouse or monitor.

Mac sales have been strong over the past several quarters. Apple's third-quarter results recorded sales of 2.5 million Macs, up 41% from a year earlier. Mac revenue rose 43% to $3.6 billion.

However, Huberty said several factors present a challenge for Apple as it tries to maintain its growth rates in the PC market. She noted that Apple has about 69% of the market for U.S. consumer PCs that cost more than $1,500, saying that "the combination of slowing unit demand and a shift to lower-end price points put Mac growth at risk."

She also said that slower growth, along with more investment to expand Apple's iPhone reach will drive up the company's operating expenses and put pressure on earnings next year.

Morgan Stanley was concerned that consensus estimates had not been revised downward to reflect slowing consumer demand and that a positive bias among equity analysts -- with 27 of 32 sell-side analysts taking positions on the stock that Huberty characterized as overweight -- had limited the upside for Apple shares during the next three to six months, Huberty wrote.

Huberty cut her 2009 earnings estimate on Apple to $5.47 a share from $5.91 a share. On average, analysts surveyed by FactSet Research currently expect Apple to earn $6.02 a share in its 2009 fiscal year.

At RBC, Abramsky lowered his price target on Apple's stock to $140 a share from $200, saying that the stock isn't "recession proof."

The analyst predicted that Apple would report good Mac sales for its fourth quarter, which finishes at the end of September, and said he anticipates unit sales will rise 34% in the quarter from a year ago. However, Abramsky trimmed his estimates for Apple's Mac sales to 2.9 million units from 3 million, and there is an "elevated risk" that the company will give a disappointing first-quarter forecast.

Abramsky cited an RBC survey of 4,300 people that showed the expressed intentions of consumers to buy a Mac are down. The RBC survey said that 29% of respondents intend to buy a Mac over the next 90 days, down from 34% in August. Abramsky also said that a separate survey showed 41% of respondents are planning to spend less on electronics over the next three months.

Such a slowdown could lead to a disappointing first quarter and be particularly damaging for Apple. The last three months of the year, fueled by consumer spending on holiday gifts, historically constitute Apple's best business period of the year.