Why Virgin Galactic's Shares Skyrocketed Today
Shares of space pioneer Virgin Galactic (NYSE: SPCE) jumped as much as 17% in trading on Tuesday as the stock market recovered and bond yields fell. At 3:40 p.m. ET shares were still up 9.8% on the day.
Virgin Galactic is a volatile stock, and as a result it tends to magnify the market's moves, whether they're positive or negative. The Nasdaq Composite was up over 1% early in trading Tuesday and is currently up 0.7%.
The other big factor driving high-risk stocks is the bond market. bond yields are dropping in the U.S., with the 10-year government bond yield down 15 basis points to 4.65% today. This has a couple of implications for Virgin Galactic. One is that traders looking at risk may find a high-risk stock like Virgin Galactic more attractive as bond yields fall. The second is that the company will find it easier to raise funds in an environment of lower interest rates.
Source Fool.com
