“Apple’s share price took a dive on Monday morning, dropping about 6 percent before making a slight recovery,” Cadie Thompson reports for CNBC. “The iPhone maker’s volume spiked to 6.7 million shares around 9:50 a.m. ET. It was the largest one minute volume of trading since Oct. 29, according to Reuters.”
“Why the stock took a hit wasn’t so clear,” Thompson reports. “RBC Capital Markets analyst Amit Daryanani said traders told him reasons for the selling may include a rating change Morgan Stanley made Monday, cutting the U.S. technology sector to ‘market weight'” from “overweight.” The firm also cut its Apple weight to 3 percent from 4 percent and recommended clients trim their position in Apple.”
“Lou Basenese, founder of Disruptive Tech Research, said that while he’s not hearing anything specific, the most reasonable explanation is that investors are just ready to cash out,” Thompson reports. “‘I think the most logical explanation is profit taking. Shares were up about 25 percent off the October lows, compared to a 10 percent move for the Nasdaq,'” Basenese said.”
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“Large sell orders were seen at 9:51 a.m. EST (1451 GMT), with more than 6.7 million shares trading in a one-minute stretch, the heaviest minute of trading in Apple since Oct. 29,” Chuck Mikolajczak reports for Reuters. “The stock lost over 3 percent in that minute, falling as much as 6.4 percent to $111.27.”
“The cause of the decline was not yet clear, though traders pointed to high-speed algorithmic trading programs as a potential culprit. Steve Hammer, a trading educator and founder of HFT Alert in Santa Barbara, Calif., which monitors algorithmic trading, said about 300 different stocks showed elevated price traffic beginning about 9:50 a.m. EST, a sign of institutions putting on sell programs,” Mikolajczak reports. “‘When you see that kind of price action that is simply algos running stocks,’ he said.”
“Morgan Stanley strategists dropped Apple’s weighting in their strategic portfolio to 3 percent from 4 percent in an equity outlook note released Monday, but traders said the swiftness of the decline was too dramatic to be attributed solely to the note, which was released before trading opened,” Mikolajczak reports. “Joseph Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey, said ‘maybe it was the Morgan Stanley news that kind of stimulated the event,’ but not enough to cause such a decline.”
Read more in the full article here.
[Thanks to MacDailyNews Readers “Fred Mertz” and “Arline M.” for the heads up.]
