U.S. markets had another dismal day, as investors questioned the earnings reports of some Wall Street big wigs. Nervousness over Friday’s job report, meanwhile, weighed on indices.
Missing from the markets right now is new leadership or a catalyst to move stocks higher. Sectors such as media and energy have been breaking down lately, and even stronger sectors, such as biotech, are flashing weakness.
Initial claims for unemployment were reported at 270,000; 3,000 higher than last month, but 3,000 fewer than what the Street was expecting. In addition, job cuts in July were more than 105,000, the highest number in four years. So traders are somewhat nervous over what tomorrow’s job numbers will bring.
The Dow Jones Industrial Average lost 0.6%, the S&P 500 Index was off 0.7%, but it was the Nasdaq which really broke down today, losing 1.6%.
Sectors were all in the red today except for energy and utilities.
Speaking of energy, Transocean LTD (NYSE:RIG) broke out of its seemingly perpetual downtrend, while 3D Systems Corporation (NYSE:DDD) and Herbalife Ltd (NYSE:HLF) comprise the latter two-thirds of our three best stocks.
Here are the full details:
Transocean LTD (RIG)
RIG stock blasted 12% higher today after crushing consensus estimates for their second-quarter earnings. RIG reported earnings per share of $1.11, ahead of the Zacks estimate for 50 cents. RIG was also ahead of estimates on revenue, posting $1.9 billion over estimates for $1.7 billion.
Cost-cutting measures were quite effective for RIG this quarter, even against falling oil prices and reduced demand.
Today’s earnings announcement was a breath of fresh air for RIG, which has seen its stock fall from $21 in May, to a recent low around $12 a share.
Hopefully, this will help RIG rebound; although oil prices will still be the major factor in RIG stock’s performance over the coming months.
3D Systems Corporation (DDD)
DDD stock soared 16% higher today, despite missing analysts’ estimates on both earnings and revenue.
The 3D printing company reported second-quarter earnings of 3 cents a share, much lower than the Street’s 8 cents bet. Revenue of $170.5 million was also shy of the $173.19 million consensus.
CEO and President Avi Reichental believes rapid expansion had allowed certain “operating inefficiencies” to occur that are now being addressed. Apparently, investors were happy to hear that, easing the pain of the earnings and revenue miss.
Similarly to RIG, 3D Systems had recently been beaten down from $32 to $12, so perhaps today’s earnings were enough to trigger some relief.
Herbalife Ltd. (HLF)
HLF stock was surging up 17% today after beating estimates on earnings and revenue.
Herbalife reported second-quarter earnings of $1.24, well above the Street’s guess of $1.11 per share. HLF’s revenue of $1.16 billion also squeaked past the $1.14 analysts were predicting.
An increasing market share in China also seems to be helping HLF’s bottom line. HLF is up 53% this year after being vindicated in a lawsuit a few months back. The lawsuit questioned whether Herbalife was nothing more than just a pyramid scheme.
Today’s action broke through recent resistance near $55, and HLF stock finished the day at $57.64.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
