Dow and AAPL down big in early trading (updated)

The Dow Jones Industrial Average is down 300 points on a report that consumer spending is down. Apple Inc. (Nasdaq: AAPL) is down US$20 (around 16 percent) as of this writing – its largest drop in over 8 months.

Apple fell $17.97 to $110.27 at 10:10 a.m. New York time in Nasdaq Stock Market trading, its lowest level since May 2007. The stock had lost 35 percent of its value this year before today.

Apple is down partially in sympathy for the rest of the market but also because Morgan Stanley analyst Kathryn Huberty said the company's price cuts will curb profit growth and then cut her estimate on AAPL shares 35 percent, from a previous target of US$178 to to US$115 per share.

Update: RBC Capital Markets also cut its rating on Apple today to "sector perform'' from "outperform'' and lowered price targets from US$200 to US$140. Barclays reinitiated with a lower price target.