A rough Tuesday for Best Buy (NYSE:BBY) had the rest of the retail sector moaning and groaning right alongside on a generally lackluster day for the broader markets.
The electronics retailer sank about 15% Tuesday to $23.73 after lousy third-quarter earnings that saw higher revenues but a 13% drop in profits, suggesting that Best Buy was far too generous with its deals this holiday season, dampening its margins. BBY also gave a gloomy forecast for 2012, saying same-store sales would be flat — at best.
Best Buy’s announcement made a poor pairing with the other retail news du jour — that overall sales were up just 0.2% in November, far less than expected — and had retail stocks running in retreat. The SPDR S&P Retail ETF (NYSE:XRT) dropped almost 3% Tuesday, and numerous retailers like RadioShack (NYSE:RSH, -7.18%), Sears Holdings (NASDAQ:SHLD, -5.12%) and Macy’s (NYSE:M, -4.98%) got burned. Even online e-tailing giant Amazon (NASDAQ:AMZN) got in on the act, dropping 4.75% to $180.51.
The rest of the market was brought down near day’s end by governmental non-news, with the Federal Reserve saying it would keep interest rates steady through mid-2013 and offering no other economic help for now. The Dow Jones had climbed more than 100 points throughout the day but finished in the red by more than 60 points, brought down by big names like Alcoa (NYSE:AA, -3.32%), Caterpillar (NYSE:CAT, -2.42%) and Bank of America (NYSE:BAC, -2.39%).
- Pandora (NYSE:P): Up 6.45% (64 cents) to $10.57. (Read more about Pandora here.)
- Urban Outfitters (NASDAQ:URBN): Up 5.33% ($1.41) to $27.87.
- Groupon (NASDAQ:GRPN): Up 4.81% ($1.07) to $23.32.
- Green Mountain Coffee Roasters (NASDAQ:GMCR): Down 12.48% ($6.54) to $49.95.
- Endocyte (NASDAQ:ECYT): Down 10.97% ($6.72) to $3.57.
- Morgan Stanley (NYSE:MS): Down 8% (21 cents) to $15.17.
As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps.