High-flying Apple falls to earth as investors fret over taxes

High-flying Apple falls to earth as investors fret over taxes

Apple Inc, the largest U.S. stock by market value, was headed toward its eighth straight week of declines on Friday, as the rush to secure profits before a potential hike in capital gains taxes next year has investors dumping the market favorite.

Since hitting a record high of $705.07 a share in September, Apple has lost about a quarter of its value. The stock's descent has vastly outpaced those of the S&P 500, which is down just under 7 percent in the same time frame.

High-flying Apple falls to earth as investors fret over taxes
Apple on Friday afternoon was little changed, up 0.2 percent at $526.59.

Taxes on capital gains and dividends are likely to rise next year as part of an expected deficit-cutting deal to avoid the so-called fiscal cliff of scheduled tax hikes and spending cuts.

High-flying Apple falls to earth as investors fret over taxes
With a stock like Apple, where investors may have large embedded capital gains as a result of its stellar run, selling now locks in gains and offsets the possibility of higher taxes next year. The uncertainty over the outcome of talks in Washington over the fiscal cliff has sapped the natural inclination to buy declining shares.

High-flying Apple falls to earth as investors fret over taxes
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