Apple dumps $158B, enters bear market

Matt Krantz | USA TODAY

Show Caption Hide Caption Can Apple recover from Friday's sell-off? | America's Markets A massive sell-off last week saw the Dow plunge over 500 points. Apple's stock is suffering. Matt Krantz takes a look in this edition of America's Markets.

Apple (AAPL) rode this bull market up - becoming the U.S.' most valuable company in the process. But now, the market's momentum is taking away a good chunk of what it gave.

Shares of Apple are got crushed again Friday, falling $6.72, or 6%, to $106.02. The stock is now down a bruising 8.5% just this week - making it an even worse performer in an ugly stock market.

The fate of Apple is more than a story of single stock. Apple is the the stock that captures if not personifies this bull market. It's a top holding by individual investors - many of whom are new in the market. Its shares have benefited from the mobile data boom, which fueled much of the bull market. And Apple's enormous profit margins and surging record cash pile are a testimony of the company's ability to command premium pricing for its products - and consumers' willingness to pay up.

But the same factors that made Apple so important during the bull - makes it the key stock to watch as the market unravels. The Apple stock crash is reaching proportions that are downright ugly - breaching three important levels that quantify just how this isn't your typical decline. Apple's fall has now:

* Wiped out of 2015 gains. Apple has swung into the red for the year, taking away the one security blanket investors have had while the rest of the market suffered. Shares of Apple are now down 3.2% on the year - a rude awakening since the stock had been up as much as 22% through its high this year. Apple is better off than the market, which is now down 3.8% on the year, but the downturn is fast and furious.

* Put the stock in a bear market. Showing just how rapid the decline has been, shares of Apple are now down a brutal 20.6% from their all time high hit earlier this year of $134.50 a share. This is an important level since a 20% decline puts Apple in what's considered to be the unofficial definition of a bear market. The broader market is down just 6% from its high - showing how much harder Apple has been hit. Seeing a key stock like Apple join the ranks of stocks in bear markets is a eye-opener for individual investors. Apple is a top holding by individual investors, says Sigfig.com.

* Shredded $158 billion in shareholder wealth. During the bull, investors were counting just how many billions they could make from Apple. Bulls were calling for Apple to be the first company worth $1 trillion. But how things have turned south. Investors have seen more than $150 billion in paper wealth vanish from the top. That's an enormous destruction in wealth, equivalent to wiping out massive companies like Pepsico (PEP) or Intel (INTC).

Investors are now facing the most serious risks to the iPhone juggernaut since Apple turned into the hero of this bull market. There are mounting signs smartphone growth is stalling as most people have one if not two or three smartphones already. Several wireless carriers such as Verizon and Sprint have recently announced changes to plans that remove smartphone subsidies. Pricing transparency will show consumers just how much iPhones really cost them - roughly $600 - not the subsided prices of $150 or even less. Some consumers might wonder if they need a premium priced device when there are lower priced alternatives - or if they can keep their phones longer than two years. Meanwhile, Apple's last big growth market - China - is seriously slowing.

Analysts remain steadfastly bullish on the stock and the company, which is still the nation's most valuable at $618 billion. Analysts on average rate the stock "outperform" and have an average 18-month price target of $147.98.

But investors can't help but think of how ugly Apple selloffs have gotten in the past. Most recently, Apple lost 43% of its value between its euphoric previous high in September 2012 through July 2013.

Investors can only hope history doesn't repeat itself again.