Despite a scary selloff to get the day started, the bulls fought back Tuesday afternoon to lead the market to a breakeven day.
At least part of the buying inspiration was born from the fact that U.S. job openings were so abundant in November, indicating of an economy that’s finally growing at a meaningful pace. The Department of Labor said that, as of the end of last month, 4.83 million jobs were still unfilled by American employers — the biggest job opening number since 2001.
Not every stock was celebrating the strong employment growth figure, however. T-Mobile US Inc. (TMUS), Spirit Airlines Incorporated (SAVE), and H & R Block Inc. (HRB) were beaten down rather badly, all for different (though equally concerning) reasons.
Spirit Airlines Incorporated (SAVE)
Investors grounded Spirit Airlines today after the company warned investors it was struggling to remain competitive with other airlines in this environment of low crude oil prices (which ultimately leads to lower operating costs for all airlines).
On Monday, Spirit Airlines lowered its fourth-quarter profit margin guidance to somewhere between 18% and 19%, explaining:
“Since late October there has been compression in the fare structure for close-in bookings believed to be driven by the industry’s willingness to trade lower fuel prices for lower fares.”
That was enough to prompt a Raymond James downgrade of SAVE stock, to a mere market-perform. When all was said and done, SAVE stock lost nearly 13% on Tuesday.
H & R Block (HRB)
H & R Block failed to meet earnings estimates for its second fiscal quarter, losing 45 cents per share of HRB stock on $134.6 million. The top line was better than the year-ago figure of $134.3 million, but this year’s loss was wider than the year-ago loss of 39 cents per share in the same quarter last year. Analysts were only looking for a loss of 42 cents per share, and expecting revenue of $142 million.
H & R Block stock named increased expenses as the culprit for the bigger loss, though that doesn’t explain almost non-existent sales growth. Regardless of the reason for the shortcomings, HRB stock fell 5% today.
T-Mobile US (TMUS)
Kudos to T-Mobile US for making a point of becoming the wireless speed leader in several of its key markets, and kudos again for (albeit quietly) following in the footsteps of Sprint Corporation (S) and pushing AT&T Inc. (T) and Verizon Communications Inc. (VZ) into a price war. None of those initiatives are free, though … as shareholders learned the hard way last night when T-Mobile US unveiled plans to raise funds through a secondary offering.
The proposed sale of 17,391,305 shares of its convertible preferred stock would be used for “for general corporate purposes, including capital investments and acquisition of additional spectrum unrelated to spectrum it may obtain in the Federal Communications Commission’s pending AWS-3 spectrum auction.”
Regardless of the use, disgruntled shareholders sent TMUS stock lower to the tune of 8% on Tuesday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
