A market primed for at least a correction was instigated to move lower when Micron Technology announced this morning that a collapse in memory chip prices will hurt its earnings. Micron shares were hit for over 3%, as were peers Lam Research, SanDisk, and Nvidia. Tech in general was weak in tandem, with the NDX down more than 1%. For a change, the damage was a bit more widespread than the tech arena. The S&P 500 fell just shy of a percent, while the Russell 200 was hit for a healthy 1.3%. It is also interesting to note that high-flyers such as Google, Research in Motion, and the big broker-dealers were also quite weak. Goldman Sachs shares reversed from $5 gain to a $3 loss as if someone greased a waterslide and push the stock over the edge.
As for our friends in the real asset realm, gold and silver tacked on another percent. However, mining shares slumped in the late-going, even though the metals held up. I imagine the general liquidation of equities caught the miners in its web, but in my mind, a buying opportunity presents itself from this action because ultimately an extended correction in stocks will accelerate the coming rate cuts.
Disclosure: Long NVDA Puts; Short GS