A closely followed exchange traded fund following the Nasdaq-100 turned positive for the session in afternoon dealings Monday as top holding Apple (NasdaqGS: AAPL) saw its shares touch $400 for the first time.
PowerShares QQQ (NasdaqGM: QQQ) was fractionally higher at last check while the Dow and S&P 500 were in negative territory.
Apple shares have surged more than 20% over the past month after breaking out of their 2011 trading range. The stock now represents 13.6% of the Nasdaq ETF.
The stock has rallied in the wake of strong quarterly results driven by better-than-expected sales of iPhones and iPads. [Tech ETFs Look for Boost from Apple’s Blowout Quarter]
“Expectations for Apple’s third-quarter results were high, and the company handily crushed them,” investment researcher Morningstar said in a note.
“Apple is an exceptional company with a clear and convincing investment case and high return potential,” added analysts at Indigo Equity Research. “High sales growth and increasing margins have led to a remarkable explosion of earnings growth since 2003. This has been from a few products in high growth segments (iPods, iPhones & iPads), as well as laptops.”
However, the current high rate of earnings growth in excess of 80% cannot last, they said in a July 22 report. “The valuation dilemma is forecasting when and how quickly earnings growth will slow; which is something that every analyst has misjudged so far.”
The Nasdaq-100 ETF is up about 10% year to date to outperform the S&P 500 by a slight margin.
PowerShares QQQ
Full disclosure: Tom Lydon’s clients own AAPL.