Apple falls but its rivals gain, pushing Nasdaq index to 3-year high

New worries about Apple Inc.’s future failed to hold back the rest of the stock market on Tuesday: Key indexes shook off some early selling to close at fresh multiyear highs.

And what’s potentially bad for Apple -- co-founder Steve Jobs’ surprise decision to take another medical leave-of-absence -- might have been viewed as good for the company’s many tech rivals.

Nobody every accused Wall Street of having a heart, after all.

While Apple dropped $7.83, or 2.2%, to close at $340.65, shares of Google Inc. surged $15.45, or 2.5%, to $639.63, a three-year high. Google’s Android smart phone operating system is going head-to-head with Apple’s iPhone, of course.

Among other tech giants and Apple combatants, Microsoft Corp. added 36 cents, or 1.3%, to $28.66; Oracle Corp. gained 28 cents, or 0.9%, to $31.53; and Dell Corp. was up 5 cents, or 0.4%, to $14.10.

Blackberry smart phone maker Research in Motion Ltd. rose as much as 2.6% early Tuesday before falling back to close with a gain of 45 cents, or 0.7%, to $65.22.

Rallies in Google, Microsoft, Oracle and other tech shares more than offset Apple’s decline within the Nasdaq composite index, which closed up 10.55 points, or 0.4%, to 2,765.85. That left the Nasdaq at its highest level since November 2007, and up 4.3% just since the new year began.

For the market overall, after the powerful rally of the last 4 1/2 months a significant pullback shouldn’t surprise anyone. The Nasdaq is up 31% since Aug. 31; the Dow Jones industrial average is up 18% in the same period.

“Dow's Doubters Say Market Is On Borrowed Time” was the headline in the Wall Street Journal on Tuesday. The story included all of the usual suspects: Investor sentiment surveys show most people are bullish, market “fear” indexes such as the VIX are too low, and weak trading volume suggests the recent advance has flimsy support.

For now, that may leave the bulls at the mercy of fourth-quarter earnings reports, which will begin to pour out this week.

On that front, Apple gave its investors a reason to stay aboard for the ride: The company said after markets closed Tuesday that fourth-quarter profit soared 78% to $6 billion, or $6.43 a share, far surpassing analysts’ consensus mean estimate of $5.41 a share.

Apple also predicted a profit of about $4.90 a share in the current quarter, compared with analysts’ mean estimate of $4.47.

Apple shares rose in after-hours trading to $345.10 -- recouping more than half of what they lost in regular trading. The stock had reached a record high of $348.48 on Friday.