Traders were unsure of what to do before today’s interest rate decision from the Federal Reserve, and they appeared to be equally unsure of where the market should be headed following Janet Yellen’s comments regarding the decision to hold the Fed funds rate steady.
By the time the closing bell rang, the S&P 500 was at 2,100.44, up 0.2% for the session, but right in the middle of the day’s trading range.
Some stocks, however, would have loved mere wishy-washiness. FedEx Corporation (NYSE:FDX), NCR Corporation (NYSE:NCR) and Adobe Systems Incorporated (NASDAQ:ADBE) all took on more than their fair share of selling pressure on Wednesday. Here’s the deal.
FedEx Corporation (FDX)
Looks like the FedEx bulls got a little ahead of themselves. After reaching new all-time highs, FDX shares were reeled in today to the tune of 3%.
The culprit was last quarter’s earnings. Last quarter’s GAAP loss of $895 million wasn’t a concern. Investors knew a one-time accounting charge of $2.2 billion was in the cards due to a pension charge that had to be booked sooner or later.
The concern was operating income. While FedEx grew its per-share bottom line from $2.54 a year earlier to $2.66 this time around, analysts were expecting a profit of $2.68 per share of FDX.
The dip in operating earnings largely stemmed from a similar drop in revenue. The top line fell 4%. FedEx claims lower fuel surcharges were a significant part of the reason for the sales lull, glossing over the fact that gasoline and diesel prices are considerably lower now than they were at this time a year ago.
Adobe Systems (ADBE)
FDX wasn’t the only name to get hit hard in the wake of earnings news. Adobe Systems stumbled as well. ADBE shares were off by 2% in the wake of an alarming earnings outlook.
Last quarter, web-based services organization Adobe did as well as was expected, and then some. The top line of $1.16 billion was in line with estimates, while earnings of 48 cents per share of ADBE handily topped estimates for a profit of 45 cents.
Guidance for the current quarter, however, was lackluster. Adobe reeled in its prior full-year outlook for a top line of $4.92 billion to only $4.84 billion … below the average analyst estimate of $4.88 billion. Its sales outlook for the current quarter was also reduced.
NCR Corporation (NCR)
Last but not least, NCR Corporation shares dipped a little too deep into the red ink on Wednesday, undoing a significant portion of the 10% gain NCR had mustered just the day before.
Traders who has been stepping into NCR over the past few days in anticipation of a buyout offer had the right idea — an offer was made, by a partnership forged between private equity firms Carlyle and Blackstone. The wind was taken out of the stock’s sails, though, when the offer rolled in well below what most interested NCR shareholders consider a reasonable offer.
Most insiders and major shareholders are reportedly looking for a price of $36 per share, which is considerably higher than what Carlyle and Blackstone seem to be willing to pay.
Now thinking the offer could simply go away rather than improve, investors are taking the profits they can, while they can. The stock fell nearly 3% on Wednesday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
