Shares in Sprint (NYSE:S) were up more than 10% at one point yesterday after Barron’s argued that the stock was undervalued. One article and the telecom company’s market cap was up almost $1.5 billion.
Nvidia (NYSE:NVDA) also rose yesterday on news that rival Intel (NASDAQ:INTC) would not produce a graphics chip which would compete with a key part of Nvidia’s product line. Nvidia’s market cap rose $1 billion and the stock hit a 52-week high.
It is hard to make a case that either the Barron’s article or the Intel announcement are worth over an over 10% increase in the market caps of Sprint or Nvidia. The Sprint move is based on one opinion. The Nvidia jump is based on expectations that Nvidia should do better in the near-term future without Intel competition. That does not take into account competition from AMD (NASDAQ:AMD) or the weak global PC market
It would not be out of the ordinary to say that a market top is often characterized by irrational trading in stocks on very marginal news or information. There seems to be more of that kind of price movement as each day passes. If weak stocks like Citigroup (NYSE:C) or AIG (NYSE:AIG) start to soar, the rally is at an end.
Douglas A. McIntyre
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
