Apple Inc. shares dropped below $500 for the first time since February after Citigroup Inc. reduced its rating for the stock on concern that demand for the iPhone 5 is slowing.
Apple fell to $499 at 6:55 a.m. New York time in premarket trading after declining 3.8 percent to $509.79 in Nasdaq Stock Market trading on Dec. 14. The Cupertino, California-based company's stock has lost 27 percent from a closing peak of $702.10 on Sept. 19.
The company's Asian suppliers have been reporting cuts in orders, which raises questions about the iPhone 5's strength, Citigroup said in a note. The bank reduced Apple to neutral from buy and cut its price target to $575 from $675. Apple's shares are heading toward their third monthly drop as the company faces competition from Samsung Electronics Co. and Nokia Oyj and had trouble meeting initial demand for the iPhone 5.
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