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Wall Street greets new Apple iPads: Buy rumor, sell news

Nothing goes up forever. After a sharp run-up in Apple's stock the last couple of weeks, investors sit on their hands after iPad rollout.

New iPads
James Martin/CNET

Classic Wall Street.

After a two-week tear in which Apple's stock climbed nearly 9 percent, shares fell $1.5 on Tuesday after the company refreshed its tablet computer line with the introductions of the iPad Air and iPad Mini with retina display.

After dropping as low as $508.03 in morning trading, Apple's shares rallied, touching a high of $528.45 before giving back all the gains to close at $519.9. But today's decidedly meh reaction from investors was less a sign that Wall Street's on-again, off-again affair with Apple was off again as it was a case of buy the rumor and sell the news.

When it comes to Apple's stock price, there's been no small amount of flip-flopping by the sachems on Wall Street. A month ago, for instance, Societe General downgraded its rating on Apple. One day before the iPad announcements, Societe General raised the company to a "buy" -- but the upgrade was primarily due to consumer reaction to the recently-introduced iPhones.

But despite frequent bouts of volatility, Apple's shares have moved up sharply since touching their 52-week low of $385.10 in April.

Prior to the announcement, Cantor Fitzgerald described the news as Apple's most important iPad event since the product's 2010 launch. Apple's vice president of marketing echoed the same theme during his time on stage, calling the new iPad Air the "biggest leap forward" in the product's history.

Hype is always the order of the day during Apple product rollouts and most of the changes in the iPad were incremental. (Read here for more.) But anything that helps Apple battle the perception that its technology edge over Samsung, Microsoft and Amazon might be slipping is sure to give bulls more fodder to make their case, longer term.

"This is what we mean by designed by Apple in California," CEO Tim Cook said, adding that any other company would be pleased to have just one of these products." Separately, he couldn't resist taking a whack at Apple's competition, calling them confused.

The buy-Apple camp also received a lift from the latest data on iPhone sales. After Apple announced the latest two models of the iPhone, some analysts had expressed concern about whether the devices were priced to appeal to the Chinese market. Others fretted about about the potential for product cannibalization. Even the Woz appeared was underwhelmed by the iPhone 5C.

But whatever their preliminary qualms, a new report by CounterPoint Research

Tablets, especially smaller versions such as the iPad Mini, also figure to be front and center during the upcoming holiday season, according to Gartner.