U.S. stocks fell on Thursday after a major Asian chipmaker delivered a disappointing forecast which dragged the technology sector lower. Shareholders also fretted over rising interest rates.
The Dow Jones industrial average closed 83.18 points lower at 24,664.89, with Apple among the worst-performing stocks in the index. The S&P 500 declined 0.57 percent to 2,693.13 with technology and consumer staples falling 1.1 percent and 3.1 percent, respectively. The Nasdaq composite dropped 0.78 percent to 7,238.06.
The major indexes pared losses in the last hour of trading after Bloomberg News stated that Deputy Attorney General Rod Rosenstein told President Donald Trump last week he is not the target of an investigation by special counsel Robert Mueller. Trump has told associates he no longer wants to fire Rosenstein now, the report said.
Taiwan Semiconductor Manufacturing (TSMC) said Thursday it anticipates second-quarter revenue to range between $7.8 billion and $7.9 billion, well below a Wall Street consensus estimate of $8.8 billion.
The declarement weighed on the entire technology sector. Shares of Apple fell 2.83 percent, while Nvidia, Micron and Advanced Micro Devices all declined at least 2.41 percent. The VanEck Vectors Semiconductor ETF (SMH) dropped 4.46 percent in its worst day since Dec. 1, 2016.
Wall Street also kept an eye on rising interest rates, as the 10-year Treasury note yield broke above 2.9 percent. The 10-year traded around these levels earlier this year, sparking a correction in the U.S. stock market as shareholders feared the inflation was rising faster than predictable. The move higher on the benchmark U.S. yield came as the two-year yield traded near highest levels in nearly a decade.
The corporate earnings season continued on Thursday, as Procter & Gamble, Bank of New York Mellon and Blackstone all stated better-than-predictable earnings. Procter & Gamble, however, dropped 4.16 percent. (Source: CNBC)
Hot Stock Analysis: Inphi Corporation (NYSE: IPHI)
Investors rushed to trade on Inphi Corporation (NYSE: IPHI) Thursday, soon after a drastic change of -4.85% in the share price was observed and the stock become able to close its trade at $30.58. The stock becomes active when traders or investors changed hands with 969,154 shares contrast to the three-month volume average of 1.14M shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 0.85, validating the stock’s In Play state.
Stock Technical’s & Performances to Explore:
Based on a recent bid, this stock (IPHI) was trading at a distance of -34.83% from 52-week high and 29.30% away from its 52-week low price. We observed -5.97% rate of return for a stock for the last 5-trading days, which was maintained for the month at -4.32%. Likewise, the performance for the quarter was recorded as -13.62% and for the year was -28.87%. The comparison of these above mentioned historical values gives an idea to investor whether the stock is ready to shift trend (up to down or down to up) or how the stock has recovered the losses or shed gains during its historical phase. For example, if stock’s weekly and monthly performances are positive as compared to year and YTD performance percentage also seems to decrease in comparison to the previous year performance, then one can say that the stock is bouncing back and may able to gain more and more in near future and vice versa. Although stock’s historical performances are key to consider, don’t invest (or not invest) based solely on it. It’s just one measure of value. As a serious shareholder, you need to look at plentiful factors that can assist you determine whether any given stock is a good investment.
Simple Moving Averages (SMAs) in Focus:
Moving averages is one of the key indicator and the most powerful tool used by traders. A simple moving average is easy to calculate, which allows it to be employed fairly quickly and easily. A textbook definition of a moving average is an average price for a security using a specified time period. The simplest form of a moving average, appropriately known as a simple moving average (SMA), is calculated by taking the arithmetic mean of a given set of values. For example, to calculate a basic 10-day moving average you would add up the closing prices from the past 10 days and then divide the result by 10. If a trader wishes to see a 50-day average instead, the same type of calculation would be made, but it would include the prices over the past 50 days and the same process goes on for 200 days.
Do SMAs Signal a Trend Reversal?
Based on a recent bid, this stock (IPHI) was trading at a distance of -0.69% from 20 days simple moving average, and its distance from 50 days simple moving average is 3.60% while it has a distance of -14.22% from the 200 days simple moving average. A moving average’s greatest strength is its ability to assist a trader identifies a current trend or spots a possible trend reversal. Moving averages can also identify a level of support or resistance for the security, or act as a simple entry or exit signal.
Stock’s Volatility Analysis:
Volatility is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. It generally deals with the amount of uncertainty or risk about the size of changes in a security’s value. It can either be calculated by means of the standard deviation or variance between returns from that same security or market index. The Rule of thumb is higher the volatility, the riskier the security. A higher volatility means that a security’s value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security’s value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.
What about IPHI Stock’s Volatility?
According to finviz data, IPHI stock’s volatility for the week is measured at 6.03%, while for the month it is maintained at 4.50%.
An Eye on Beta Factor:
One gauge of the relative volatility of a specific stock to the market is its beta. A beta approximates the overall volatility of a security’s returns against the returns of a relevant benchmark (usually the S&P 500 is used). Presently, Beta factor for IPHI stock stands at 0.94. A beta of 1 indicates that the security’s price moves with the market. A beta of less than 1 means that the security is theoretically less volatile than the market. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market. For example, if a stock’s beta is 1.2, it’s theoretically 20% more volatile than the market. Conversely, if an ETF’s beta is 0.65, it is theoretically 35% less volatile than the market. Therefore, the fund’s excess return is predictable to underperform the benchmark by 35% in up markets and outperform by 35% during down markets.
What Do Analysts’ Recommend?
Analysts mean recommendation for the stock is 2.30, (where 1 is Strong Buy and 5 is Strong Sell).
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