What Happened?
Shares of mortgage servicing company Mr. Cooper Group (NASDAQ: COOP) fell 1.9% in the afternoon session after investors took profits as the stock hit a new 52-week high.
The pullback occurred despite the stock's recent strong performance and bullish sentiment that propelled it to a new peak earlier in the day. Such reversals can happen when a stock reaches a significant milestone, prompting some investors to sell shares and lock in recent gains. There was no specific negative news released by the company to explain the decline. In fact, the broader mortgage industry backdrop appeared favorable, with reports of mortgage interest rates continuing their downward trend in September.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Mr. Cooper Group? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Mr. Cooper Group’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 2.9% after an unexpected decline in wholesale inflation reinforced bets that the Federal Reserve will cut interest rates.
The Producer Price Index (PPI), a measure of inflation at the wholesale level, unexpectedly ticked 0.1% lower in August, contrary to economists' estimates of an increase. This report has soothed concerns that persistent inflation would prevent the central bank from lowering its key interest rate. Following the data, traders are now almost fully pricing in multiple rate reductions in 2025. The prospect of lower rates from the Fed generally leads to lower mortgage rates, which is a significant catalyst for the housing market as it makes financing a home purchase more affordable for consumers.
Mr. Cooper Group is up 130% since the beginning of the year, and at $216.17 per share, it is trading close to its 52-week high of $220.35 from September 2025. Investors who bought $1,000 worth of Mr. Cooper Group’s shares 5 years ago would now be looking at an investment worth $9,898.
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