The new trading week got off to a rough start, picking up where it left off on Friday — bearishly. There was no particular news to inspire the selloff, though. And, we’d even gotten some clues around mid-day on Monday that the selling was abating. Nevertheless, today’s 1.41% loss from the S&P 500 has pushed the index to the brink, where value means little and fear of risk means everything.
Leading the bearish charge on the first day of the new week were Williams Companies Inc (NYSE:WMB), First Data Corp (NYSE:FDC) and Workday Inc (NYSE:WDAY). Here’s what investors need to know.
Williams Companies Inc (WMB)
Plenty of stocks were deep in the red, along with the overall market, on Monday. The worst of the worst of the large caps, however, was Williams Companies and its companion Williams Partners LP (NYSE:WPZ). WMB finished the day down more than 34%, while WPZ closed 19% lower.
The explanation is a bit complicated. Certainly part of the reason for the weakness was yet another pullback in the price of oil (this one to the tune of 2.3%). The biggest part of the pullback, however, was driven by rumors that Chesapeake Energy Corporation (NYSE:CHK) was mulling bankruptcy.
Yes, a “What’s good for the goose is good for the gander” mentality applied, pulling Williams Companies lower. The impact CHK had on WMB and WPZ shares, though, was company-specific. That is, Williams Partners — the limited partnership side of Williams Companies — relied on lucrative contracts with Chesapeake Energy that could be jeopardized if Chesapeake were to restructure itself.
First Data Corp (FDC)
While most stocks have responded bearishly to earnings reports this earnings season, First Data Corp is the first to behave so bearishly before an earnings announcement was even made.
On Monday, shares of e-commerce payment middleman outfit First Data fell more than 14%, bringing its year today rout to a loss of 30%. The lousy market environment certainly helped shoo FDC stock lower, but more realistically, the bulk of the weakness was the market getting out of the stock in front of Wednesday morning’s upcoming earnings report for fiscal Q4.
As of the latest look, First Data Corp is projected to earn 25 cents per share on a top line of $1.85 billion, which compares favorably to the year-ago bottom line of 20 cents per share of FDC, but pales in comparison to the year-ago revenue total of $2.92 billion.
Seeing a strong selling response to most any earnings reports posted thus far this earnings season, traders just aren’t taking any chances with FDC.
Workday Inc (WDAY)
Last, but certainly not least, Workday shares led a bearish charge for most cloud-based stocks on Monday; salesforce.com, inc. (NYSE:CRM) wasn’t far behind the WDAY pullback of 10% with a 7% tumble of its own.
But, don’t blame Workday or salesforce.com for their stocks’ meltdowns today. Blame Tableau Software Inc (NYSE:DATA), which spooked its own investors last Thursday when the company reported Q4 numbers that fell short of estimates.
While Tableau Software doesn’t compete head-to-head with salesforce.com or Workday, they all operate similarly, and if one is doing poorly there’s a good chance they’re all struggling. Well, Tableau Software is doing poorly, and though that news was unveiled last week, it’s still weighing on all investors’ minds.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
