On Tuesday, it looked like the market had a shot at shrugging off Monday’s horrible start to the new trading year. Today, though, it became clear the bears aren’t going away. Between reports of an atomic bomb being developed in North Korea and payroll growth that leaves plenty of room for more interest rate hikes, the S&P 500 lost 1.31%, ending the session at 1990.30.
That was nothing compared to the losses Energy Transfer Equity LP (NYSE:ETE), Skyworks Solutions Inc. (NASDAQ:SWKS) and Sony Corp. (NYSE:SNE) dished out today, though. Check out what went wrong for these three names.
Energy Transfer Equity LP (ETE)
Wednesday was yet another losing day for crude oil. Crude prices fell nearly 6% to a new multiyear low around $34.30 per barrel, taking most energy stocks lower with it.
Leading that bearish parade was (once again) Energy Transfer Equity. Long-beleaguered ETE shares lost 15% of their value in the midst of the oil rout, as MLP-structured pipeline plays are among the most adversely impacted when oil prices are under fire.
ETE was hardly alone, though. Apache Corporation (NYSE:APA) and Williams Companies Inc. (NYSE:WMB) were right behind Energy Transfer Equity, each down more than 10% on Wednesday.
Sony Corp. (SNE)
How does the old saying go? Buy the rumor, sell the news? If that’s the case, it might explain why Sony shares got walloped to the tune of 7.2% today.
The news: Sony sold 35.9 million PlayStation 4 gaming consoles in 2015… a proverbial boatload by video gaming standards. It’s a tally that makes Sony the undisputed king of video gaming, leaving Microsoft Corporation (NASDAQ:MSFT) and Nintendo Co., Ltd (OTCMKTS:NTDOY) in the dust. But, such a number establishes a strong likelihood of “as good as it gets” syndrome for SNE. In this case, there’s no plausible way Sony could dish out a repeat performance of the impressive sales feat, leaving SNE investors to wonder what — if anything — is next.
Fanning those bearish flames was a lack of any major virtual reality announcements, with the company mostly focusing on video and audio equipment. Fearing it could mean Sony eventually falls behind on an important consumer technology front, SNE shareholders saw the conservative move in a glass-half-empty light.
Skyworks Solutions Inc. (SWKS)
Last but not least, Skyworks Solutions followed through today with the selloff it began on Tuesday. All told, the 4.5% loss SWKS booked today puts it in the hole by more than 9%.
The prompt for the selloff was a retracted expectation in the number of iPhones Apple Inc. (NASDAQ:AAPL) sold last quarter and will sell in the current quarter. Specifically, some pros believe Apple cut its phone orders by as much as one-third for the quarter ending in March.
If the rumor is true — and it appears to be a relatively well-supported notion — it will effect SWKS as it’s one of the key suppliers of iPhone components.
The concern was legitimate enough for Citigroup analyst Atif Malik to cut his earnings expectations from SWKS to $6.11 per share (from $6.66) this year. Malik explained:
“Apple is 40% of the RF $ market sales and 32% / 34% of QRVO/SWKS sales respectively. Apple iPhone assembler total sales show a decent correlation (R2 ~0.7) to RF sales but are not a perfect indicator given lower Samsung and China sales exposure (Fig 1). Based on our sensitivity analysis both QRVO and SWKS would have a $0.40 impact to EPS per every 10M units cut from iPhone sales.”
EDITOR’S NOTE: This article has been edited to clarify that Sony made no major announcements about virtual reality gear.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
