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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of rare earth oxide producer Molycorp (NYSE: MCP ) plunged as low as 14% in intraday trading today on news that China was looking to end its "embargo" on rare earth metals.
So what: Molycorp and Rare Element Resources (AMEX: REE ) have sky-rocketed recently on China's increasing reluctance to export rare earth elements to the rest of the world. It's no surprise, then, that today's New York Times report -- which suggests that China is reversing course -- had those very same stocks plummeting.
Now what: Just yesterday, fellow Fool Tim Beyers suggested that rare earth stocks were particularly bubbly, and I have to agree. Even when you factor today's double-digit plunge, Molycorp is still up more than 160% since its late July debut. But without China-scare headlines feeding the rare earth buying frenzy, it's tough to see how Molycorp stays at these lofty levels.
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