U.S. stocks closed sharply lower Tuesday, led by a selloff in industrials, materials and technology shares.
The selling pressure came after the 10-year Treasury yield briefly touched the psychologically important 3% level for the first time in four years, a move that comes as first-quarter earnings season was failing to excite shareholders, despite some strong results.
While the earnings season remained in full swing, the tone was generally negative, with several bellwether stocks slumping despite posting numbers that were ahead of analyst forecasts.
The Dow Jones Industrial Average slumped 424.56 points, or 1.74%, to 24,024.13, booking its fifth successive decline, the longest losing stretch since March 17, according to FactSet data.
The S&P 500 index fell 35.73 points, or 1.34%, to 2,634.56, with eight of the 11 main sectors ending in negative territory.
The Nasdaq Composite Index declined by 121.25 points, or 1.70%, to 7,007.35, ending with losses for a fourth straight session, its longest streak since February.
Trading in the stock market has been heavily influenced by U.S. Treasury yields, and that theme re-emerged as the 10-year Treasury yield touched the psychologically important 3% handle on Tuesday and hit a four-year high. The 10-year yield subsequently pulled back to trade at 2.979%. Yields and debt prices move in opposite directions.
Earnings were also in focus, with a deluge of high-profile companies reporting results before the open. The season has so far been strong, and more than 80% of the S&P 500 companies reporting so far have beaten profit forecasts. While that’s above the 73% that beat in the fourth quarter of 2017, better-than-predictable results often haven’t been enough to lift shares thus far this season. (Source: MarketWatch)
Hot Stock Analysis: Rigel Pharmaceuticals Inc (NASDAQ: RIGL)
Investors rushed to trade on Rigel Pharmaceuticals Inc (NASDAQ: RIGL) Tuesday, soon after a drastic change of 3.61% in the share price was observed and the stock become able to close its trade at $3.73. The stock becomes active when traders or investors changed hands with 2,449,389 shares contrast to the three-month volume average of 2.82M shares. The ratio between current volume and 3-month average value, also known as Relative volume was observed at 0.87, validating the stock’s In Play state.
Stock Technical’s & Performances to Explore:
Based on a recent bid, this stock (RIGL) was trading at a distance of -20.81% from 52-week high and 74.30% away from its 52-week low price. We observed -9.25% rate of return for a stock for the last 5-trading days, which was maintained for the month at 0.54%. Likewise, the performance for the quarter was recorded as -16.93% and for the year was 26.44%. 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 (RIGL) was trading at a distance of 3.50% from 20 days simple moving average, and its distance from 50 days simple moving average is -2.26% while it has a distance of 8.71% 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 RIGL Stock’s Volatility?
According to finviz data, RIGL stock’s volatility for the week is measured at 11.86%, while for the month it is maintained at 12.50%.
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 RIGL stock stands at 1.40. 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 1.80, (where 1 is Strong Buy and 5 is Strong Sell).
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