Microsoft Suffers Worst Day In Years

Microsoft Corporation MSFT shares are trading lower by $4.18 (7.4 percent) at $51.60 in Friday's session. The catalyst for the huge decline is a Q1 EPS miss of $0.02 with a slight miss for revenues.

What may accounting for one of its worst days in quite some time may be the way the Street was leaning into the report. In other words, in anticipation of a good report, the Street had taken the issue to its highest level since 2000, when it reached $56.77 on Wednesday. Therefore, all the momentum and break-out traders have to exit the trade into weakness after the weak report.

Related Link: Microsoft's Q3 Was Tough But Core Story Remains Intact, Morgan Stanley Says

Also, shorts that covered ahead of the report are now looking to re-enter the position.

The beat down from the after-hours and pre-market session has followed through into the regular session. After a lower open, it managed at brief rally to $52.43 before sellers engulfed the issue.

So far, the decline took the issue all the way to $50.77 before rebounding back into the $51 handle.

That marks the lowest level for the issue since early March, when it put in a pair of lows on March 7 ($50.58) and March 8 $50.60).