By Chuck Mikolajczak

NEW YORK (Reuters) - Apple Inc shares tumbled shortly after the start of trading on Monday, briefly suffering their largest price drop in at least three months on an unusual spike in volume.

Selling accelerated just before 9:51 a.m. EST (1451 GMT), with more than 6.7 million shares trading in a one-minute stretch, the heaviest minute of trading in Apple since Oct. 29, according to Thomson Reuters data.

The stock lost over 3 percent in that minute, falling as much as 6.4 percent to $111.27. At midafternoon, it was down 3 percent to $115.45.

The cause of the decline was not yet clear, though traders pointed to institutions using selling programs across a wide swath of stocks. Steve Hammer, a trading educator and founder of HFT Alert in Santa Barbara, California, which monitors algorithmic trading, said about 300 different stocks showed elevated price traffic beginning about 9:50 a.m. EST, a sign of institutions putting on sell programs.

"When you see that kind of price action that is simply algos running stocks," he said.

As of 2:05 p.m. EST (1905 GMT), more than 64 million Apple shares had traded, making it the most active issue in U.S. markets.

A sharp price move coupled with high volume often prompts speculation about the influence of high frequency trading (HFT), when computer algorithms are used to trade stocks at an extremely rapid pace. HFT has been criticized for affecting the trading of stocks by sending in numerous trade quotes that slow quote activity - without filling the trades when shares fall.

"What that is called is evaporation of liquidity, liquidity that was never there in the first place and it’s a typical maneuver that goes on in the fragmented stock market we have now," said Joseph Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

However, determining the cause of the decline wasn't so simple. “The fact is we don't yet know what caused the drop, and blaming it on HFT is misleading,” said Bill Harts, chief executive officer of Modern Markets Initiative, an advocate of high-speed electronic markets.

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Similar declines on heavy volume, though not as dramatic, were seen in other stocks, including Alibaba Group Holding Ltd , which fell 1.4 percent in one minute, and the S&P 500 tracking ETF , which had its busiest minute of trading on Monday at 9:51 a.m., when nearly 1.5 million shares traded.

At the day's low, Apple lost more than $40 billion in market value.

The recent ructions in the oil market were also cited as a potential catalyst for the selling in Apple. Traders said the need to free liquidity as oil and energy shares fell could have had an effect on other markets.

"Funds that suffered losses on their oil investments have to get out of their liquid securities in other sectors," said Sam Ginzburg, head of trading at First New York Securities in New York.

Morgan Stanley strategists dropped Apple's weighting in their strategic portfolio to 3 percent from 4 percent in an equity outlook note released Monday, but traders said the swiftness of the decline was too dramatic to be attributed solely to the note, which was released before trading opened.

Saluzzi said "maybe it was the Morgan Stanley news that kind of stimulated the event," but not enough to cause such a decline.

(Additional reporting by Herb Lash, Ryan Vlastelica and David Gaffen; Editing by Jeffrey Benkoe)