Apple Shares Now Off 10% From Record High

Shares of Apple (Nasdaq: AAPL), the world's most valuable technology company, have now fallen more than 10 percent from their all-time high of $705.07 set on Sept. 21, when the iPhone 5 went on sale.

In early Tuesday trading, shares of the Cupertino, Calif.-based electronics developer fell as low as $623.55, before recovering to close at $635.85, down $2.32, or 2 percent.

The nearly 11 percent decline from the peak indicates Apple stock has entered a “correction” from its high. Shares had risen dramatically all year and are still up 57 percent in 2012 and 72 percent for the past 52 weeks.

The fall still keeps Apple as the most valuable U.S. company, with a market capitalization of $596 billion -- down from highs above $650 billion -- compared with No. 2 Exxon Mobil’s $425 billion.

Analysts still expect Apple to report record net income and revenue for the fourth quarter ended Sept. 29 on Oct. 25. Still, because the shares had such a dramatic run-up this year, many saw the downturn as a relief. The Tuesday bottom could be a benchmark from which its starts rising again.

At Nomura Securities, analyst Stuart Jeffrey started coverage of Apple with a "neutral" rating and a price target of $710, far below the $1,111 high posted by Topeka Research's Brian White. The reason: too much of Apple's current momentum depends upon sales of iPhone 5 in a market which is subject to "volatile swings," he said.

Jeffrey expects Apple to exceed expectations for fourth-quarter earnings, though.

At Sterne Agee, analyst Shaw Wu said the fallback is a "a typical consolidation after a big run." Besides strong demand for the iPhone 5, Wu said he expects Apple will have another hit if it announces a long-expected iPad Mini for fourth-quarter shipment.

Wu said Apple has been the recent subject of complains about labor problems at its Chinese suppliers, lack of Google Maps from Google (Nasdaq: GOOG) in the iPhone 5 and other "minor product complaints."