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Can someone please explain to me how stock prices go up and down? What are the underlying physical and information technology phenomena and algorithms that drive a stock up or down? Books just say that a stock price reflects what their owners think the stock is worth and not what it is actually worth.

Thank you for your feedback.

The short answer: many factors. The following are some key ones:

1. Reported Trades - Stocks are quoted "bid" and "ask" rates. These are the traders setting their prices much similar to a local farmers market trading their produce.


2. Volume - number of shares traded.


3. Price trend - When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.


4. Institutional actions - Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

1. 
   https://finance.zacks.com/can-tell-direction-stock-price-looking-bid-vs-ask-volume-2758.html


2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $s_a$ or buy from you at a price $s_b$. Since $s_a>s_b$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this "inventory" carefully.

If $s_a,s_b$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $s_a,s_b$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

That's a most difficult question to answer as the famous quote says "in short run the markets are like voting machines". What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.