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Apple shares hit record high on more 'tablet' rumors

December 24, 2009 |  1:52 pm

Santa arrived early for Apple Inc. shareholders: The stock today surged $6.94, or 3.4%, to close at a record high $209.04. That topped the previous closing high of $207 on Nov. 17.

The buzz continues to build about the company's widely anticipated (albeit unconfirmed) tablet computer.  The Financial Times reported that Apple has rented a stage at the Yerba Buena Center for the Arts in San Francisco for several days in late January, most likely for a product announcement.

But as the FT notes, “Apple has explored making tablet style devices for years, only to back off. The company also has a history of scrapping products very close to their scheduled launch dates.”

Applelogo No matter to Apple stock bulls, who figure something good is coming in January. The shares now are up a massive 145% year to date after plunging 57% in the market meltdown of 2008.

Apple stock’s price-to-earnings ratio is about 27 based on analysts’ mean earnings estimate of $7.83 a share for the fiscal year ending next September. That’s expensive relative to the average blue-chip stock P/E of about 15 based on 2010 earnings estimates, but it’s a far cry from the P/Es of tech’s wacko days of the late 1990s.

Apple’s stock market value now is $188 billion, which tops IBM ($171 billion), General Electric ($164 billion) and Chevron ($155 billion), among others, and is closing in on Google ($196 billion) and Wal-Mart ($204 billion).

Besides the hype over the tablet, Apple is benefiting from Wall Street’s strong appetite for tech stocks in general in 2009. And in a year like this, the rich tend to get richer as the calendar runs out: Some money managers most likely are adding hot tech stocks to their holdings to dress up the portfolios for year-end statements to clients -- as in, “Hey, look how smart we were to own these winners.”

Other tech issues hitting new 52-week highs today: Google, up $6.80, or 1.1%, to $618.48; Microsoft, up 8 cents, or 0.3%, to $31; IBM, up 57 cents, or 0.4%, to $130.57; and Xilinx, up 30 cents, or 1.2%, to $25.36.

Tech’s rally helped push  broad market indexes to new highs for the year as well, in a shortened holiday session. The Dow Jones industrials closed above 10,500 for the first time since Oct. 1, 2008, adding 53.66 points, or 0.5%, to 10,520.10.

The tech-heavy Nasdaq composite gained 16.05 points, or 0.7%, to 2,285.69.

Year to date the Nasdaq is up 45% to the Dow’s 20% gain. If you didn’t own tech this year -- what were you thinking?

-- Tom Petruno

Photo: Russel A. Daniels / Associated Press