As quickly as the rally materialized on Monday, it fizzled on Tuesday despite an encouraging level of housing starts and building permits for July. And yet, even with today’s lull, stocks remain mostly on the fence. The S&P 500’s loss of 0.26% and close at 2096.92 on Tuesday still leaves it on the proverbial fence in terms of momentum.
It could have been worse, though … and for shareholders of Abercrombie & Fitch Co. (NYSE:ANF), Wal-Mart Stores, Inc. (NYSE:WMT) and Micron Technology, Inc. (NASDAQ:MU), it was worse.
Here’s why.
Micron Technology, Inc. (MU)
The pain continues for Micron Technology shareholders, who watched the stock lose another 5% on Tuesday. Though MU technically hit a lower low on Monday and partially bounced back, today’s close was the lowest close since September of last year, with no end to the pain in sight.
The pullback wasn’t spurred by any news about Micron unveiled today. Rather, it was the digestion of a wave of alarming news from yesterday regarding MU that did the deed. Among the most damaging was Jim Cramer’s recommendation to steer clear of the stock for at least a while longer, as well as Summit Research’s lower price target on Micron shares from $30 to $25.
Wal-Mart Stores, Inc. (WMT)
Walmart is already feeling the fiscal downside of raising the minimum pay for its workers. Although last quarter’s sales were better than expected, per-share profits for WMT rolled in lower than anticipated on higher payroll costs.
All told, the world’s biggest retailer earned $1.08 per share on $120.2 billion worth of sales last quarter. The top line beat estimates for $119.7 billion in revenue, though WMT’s bottom line fell short of the profit of $1.12 per share that the pros were looking for this time around. Last quarter’s profit of $1.12 per was well below the year-ago figure of $1.21, though sales grew a bit from the year-ago revenue total of $120.1 billion.
Although the same-store sales growth of 1.5% suggests Walmart is clearly doing something better, seeing the glass as half-empty rather than half-full, investors sent WMT lower to the tune of more than 3% on Tuesday.
Abercrombie & Fitch Co. (ANF)
Last but not least, at the end of last year when gaffe-prone Abercrombie CEO Michael Jeffries finally stepped down, most ANF shareholders breathed a sigh of relief despite knowing his exit would be a change for the better. Most of those investors didn’t even care that even through today, a replacement has yet to be named.
Given the stock’s 6% tumble in the wake of today’s news, though, Abercrombie are understandably less than thrilled that a major management decision has been made in the absence of a CEO who really should be coordinating these newcomers to the company in their newly created roles.
As of today, Abercrombie & Fitch has a General Manager for A&F Womens, a General Manager for abercrombie kids, a Head Designer for A&F Womens, a Head of Planning Operations for A&F and abercrombie kids, a Head Designer for A&F Mens, and a General Manager for A&F Mens.
The employees taking on these roles are qualified enough. But with no clarity on who hired them, who will manage them, and the tacit suggestion that the company’s search for a new CEO is going to continue indefinitely, ANF shareholders are quickly losing confidence on the idea that the retailer is serious about a turnaround.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
