Apple (AAPL) Mini Flash Crash Renews Market Structure Worries

The futures point to another lower open again Friday, making that three straight gap downs. Shocking stuff I tell you. Unrest continues in Egypt after President Hosni Mubarak announced plans to slowly transfer power to the next government, headed by Vice President Omar Suleiman. Earlier in the day Mubarak was expected to announce plans to step down, so the apparent about-face enraged protesters. The situation is expected to remain volatile through the weekend, despite the fact the President is taking a brief sojourn in southern Egypt to dampen the furor in Cairo. Despite the market coming under pressure overnight the last three days, it continues to hold above high level support.

On the earnings and news front, Nokia Corporation (NOK) is down more than 10% after the company announced plans to use Microsoft’s mobile operating system.

In contrast, Panera Bread Company (PNRA) shares are more than 8% higher after raising 2011 outlook in its earnings report. Cisco Systems, Inc. (CSCO) continues to be the dog of this market, falling intraday to major support at December lows after gapping down 13% on a second straight weak quarter of earnings.

Yesterday, Apple Inc. (AAPL) saw a mini-flash crash of sorts in the afternoon yesterday. While the catalyst for the sell-off was news related–sparse crowds outside Verizon stores , mainly–the selling pressure was very disorderly. The stock saw a big jump down from $352.50 to $348.00 in a 1-2 minute span as market makers were conspicuously absent. AAPL recovered more than half of those losses by the end of the day, also very flash crash-esque. No matter the reason for the sell-off, the nature of it reinforces concerns about market structure.

Research in Motion Limited (RIMM) also got a bounce in late session trading yesterday on the announcement the company’s PlayBook tablet would run Google android apps. This move also suggests the company could soon use the popular Android mobile operating system on its smartphones as well.

The rare earth group is seeing more weakness overnight, headlined by leader Molycorp, Inc. (MCP) which is preparing its secondary stock offering. The company priced its highly anticipated secondary offering of 13,500,000 shares at $50.00, compared to a 52-week high near $63 and a $55.71 closing high just this week. The secondary offering will fund Phase 2 development at the company’s Mountain Pass, California rare earth facility, which is expected to double its output by the end of 2013.

Disclosure: Scott is long CSCO, RIMM, SHZ

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About John Darsie 46 Articles

John Darsie is the Business Editor of

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