Earnings continue to send technology stocks lower and GOOG was not any different. To begin the day jobless claims were much worse than expected. The biggest story of the day was GOOG’s release of its earnings well ahead of the close. More than 3 billion shares traded in ten minutes as the stock was hammered. We can thank High Frequency Trading for the massive amount of volume pouring into the stock. Despite that massive selling in the stock volatility did not spike hard, but did so in the after-hours session. Volume ballooned across the board for the fourth straight day as earnings season continues to play havoc with stocks. Technology stocks and the NASDAQ are out of favor while the S&P 500 continues to remain top dog.
High Frequency Trading was certainly a big reason for GOOG’s price action today. Three BILLION shares in TEN minutes seems a bit outrageous and it is. The stock is liquid, but not 3 billion in ten minutes. What is truly amazing is the stock did not trade for hours after being halted. We can only imagine how many shares would have traded and the damage would have been done if the stock had not been halted. Today’s action in the stock is another example what happens when machines fight each other. Other than the exchange and HFT firm what benefit does HFT have?
The NASDAQ continues to suffer from earnings reports out of the technology sector. MSFT was another casualty in the after-hours session after its earnings release. The stock did manage to climb off the lows of the after-hours session but was still down more than 1.3%. Other losers were CMG along with SBUX. Earnings season has really only benefited banks thus far despite Morgan Stanley’s reversal today. Tomorrow’s option expiry will add fuel to the fire and we’ll see how MSFT, SBUX, and CMG act tomorrow.
Have a great weekend and remember to cut those losses.