U.S. markets traded lower today as Wall Street investors were stunned by the forward guidance report by Wal-Mart Stores, Inc. (NYSE:WMT), and another overseas report hinted that China’s economy is weaker than believed.
Walmart missed analysts’ expectations on it earnings forecast for 2017 and dropped 10%, dragging down other retail stocks like Sears Holdings Corp (NASDAQ:SHLD) and J C Penney Company Inc (NYSE:JCP) with it. In addition, despite lower gasoline costs, the Commerce Department reported that U.S. retail sales for September rose a scant 0.1%.
The release of the Federal Reserve’s Beige Book this afternoon, which showed modest overall economic expansion in the U.S. didn’t seem to help stocks very much.
Overseas, China’s consumer price index (CPI) was up 1.6% year-over-year for September, but the forecasts were for 1.8%, causing the Shanghai Index to drop nearly 1% on the day.
The Dow Jones Industrial Average fell 0.9%, but the S&P 500 lost only 0.5% and the Nasdaq was off 0.3%. Sectors were evenly mixed, and once again energy and materials were the place to be.
Several Nasdaq stocks were standouts today, as SanDisk Corporation (NASDAQ:SNDK), Tripadvisor Inc (NASDAQ:TRIP) and Office Depot Inc (NASDAQ:ODP) had that index outperforming the other two. M&A talk was the major catalyst.
SanDisk Corporation (SNDK)
SNDK was an 11% gainer on Wall Street today after rumors surfaced that the company is exploring a potential sale to an unnamed firm. However, Bloomberg reported that SNDK has been in discussion with both Micron Technology, Inc. (NASDAQ:MU) and Western Digital Corp (NASDAQ:WDC), and has now hired a bank to examine a potential sale.
With all of the recent consolidation within the tech sector, speculation of a possible sale was all it took to send SNDK shares higher and increase its market cap from $12.6 billion to $14 billion in one day.
SNDK shares have risen about 50% over the past six weeks.
Tripadvisor Inc (TRIP)
TRIP stock blasted 25% higher today after announcing it has formed a strategic alliance with Priceline Group Inc (NASDAQ:PCLN), in which Priceline’s various online travel brands will utilize TRIP’s instant booking platform.
In addition to Priceline, TRIP will add Priceline subsidiaries Booking.com and Agoda.com brands to its platform.
TRIP is owned by Liberty TripAdvisor Holdings Inc (NASDAQ:LTRPA), which surged 28% today.
Office Depot Inc (ODP)
Shares of ODP were up by 7% today, after a small loss yesterday. On Tuesday, ODP stock declined after agreeing with the Federal Trade Commission (FTC) to delay the review date on the merger between Staples, Inc. (NASDAQ:SPLS) and Office Depot until December 8.
The FTC was scheduled to make its decision on the merger by this week, but pressure from European Union (EU) regulators who fear the antitrust impact of the merger has made the FTC more cautious.
Staples announced in February that it would be acquiring Office Deport, and the company has since been working with the FTC to provide documents and information necessary for a decision to be reached.
Also lifting ODP today was a report that Staples plans to limit golden parachutes and require shareholder approval in order for senior executives to exceed a severance benefits cap. The new policy states the executives’ severance is capped at 2.99 times the sum of the base salary and target annual cash incentive award.
As of this writing, Ethan Roberts did not hold a position in any of the aforementioned securities.
