Apple nears 2-year lows, but this Dow Jones stock just hit all-time highs


The stock market continued to limp towards the end of the year, and it looked increasingly unlikely that Wall Street would be able to mount a successful rally to build momentum through 2023. Wednesday’s early gains are are transformed into losses at all levels for the main market benchmarks, with the Dow Jones Industrial Average (DJINDICES: ^DJI) giving up a modest rise to fall nearly 200 points by midday.

For a long time, Apple (NASDAQ:AAPL) seemed unfazed by the decline in high-growth tech stocks, with its consumer-favorite electronics continuing to attract strong demand even in tough economic conditions. Lately, however, Apple has been unable to avoid the decline in large-cap tech stocks, and its share price is now approaching levels not seen in nearly two years since the start of 2021.

Yet even as Apple faces pressure, another component of Dow Travelers (NYSE:TRV) reached historic highs on Wednesday. Here is an overview of the two actions.

Apple shareholders fear the economic crisis

Apple shares were down 2.5% at noon ET Wednesday. This took the stock’s decline for the year to more than 25%, and while that’s actually better than the performance of many of its big tech peers, it’s still a far cry from the percentage losses to a figure for the broader Dow Jones Industrials.

The immediate problem that Apple has faced in recent weeks is that its supply chain for the production of various models of its new iPhone 14 product line has been disrupted. In particular, customers ordering the Pro and Pro Max models of the iPhone 14 faced unusually long delays before they could expect to receive their smartphones. This led to a steady decline in expected iPhone unit sales during the key holiday quarter, potentially disappointing potential gift givers hoping to have devices in hand as gifts.

Longer term, even if Apple fixes its supply chain issues, the tech giant will also face weakening macroeconomic conditions that could weigh on sales. That’s especially true with some of its more expensive products, and even with discounts from channel partners like mobile carriers, Apple could see a bigger drop in sales that could weigh on growth and earnings in 2023. .

Apple still has many compelling reasons for shareholders to hold its stock for the long haul. The realization that it is not immune to bear market pressures, however, has dealt a blow to the confidence of some investors.

The stock of travelers reaches a new record

Meanwhile, however, insurance giant Travelers traded briefly at an all-time high before giving ground. The stock was down about 1% around midday.

Interestingly, the same factors that have proven problematic for many tech stocks have helped propel travelers to all-time highs. Rising interest rates have restricted access to capital for high-growth small businesses, but because Travelers holds significant income-generating investments, rising rates mean increased future interest income which, at in turn, should increase spending.

At the same time, the market environment for many lines of insurance was strong. Travelers saw growth in the third quarter in its three segments, including personal insurance, commercial insurance and various specialty products. Strong underwriting practices have also helped bolster the insurance giant in the face of tough economic times.

Insurance is a cyclical business and travelers can expect to experience sometimes difficult conditions. But for now, shareholders are reaping the rewards of a strong period for travellers, and those gains could continue through 2023.

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Dan Caplinger holds positions at Apple. The Motley Fool holds positions and recommends Apple. The Motley Fool recommends the following options: $120 long calls in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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