The bulls held on as long as they could after this morning’s lackluster gross domestic product report for the first quarter of the year. But the longer the news had to fester, the longer traders had to decide there’s simply more risk than reward in owning stocks today. The S&P 500 ended the session at 2075.81, down 0.92%.
Leading the charge lower were Abbott Laboratories (NYSE:ABT), GNC Holdings Inc (NYSE:GNC) and Symantec Corporation (NASDAQ:SYMC).
Here’s a closer look at each one’s demise.
Abbott Laboratories (ABT)
At another time and in a different situation, an acquisition may have been a big hit with investors. With a great deal of uncertainty on the horizon, however, Abbott Laboratories shareholders were more concerned than thrilled with the company’s decision to acquire cardiovascular medical technology name Saint Jude Medical.
The premise and logic of the deal mustered a few supporters. Mostly though, professionals and amateurs alike don’t see a ton of upside given the $19.3 billion price tag on the union.
BMO Capital Markets analyst Joanne Wuensch asked the following: “St. Jude is in more mature cardiac rhythm management markets, so does this really become additive to the overall Abbott revenue growth rate?” Meanwhile, Morningstar’s Debbie Wang worried, “Once they make those purchases, it does not seem like management is very good at producing meaningful innovation.”
The near-8% loss ABT shares logged today says the majority of shareholders have the same concerns.
GNC Holdings Inc (GNC)
GNC Holdings shares lost a whopping 29% today following the company’s Q1 earnings report and news that it was aiming to close more than 80 company-owned stores.
In its first fiscal quarter of 2016, nutritional supplement company GNC Holdings reported a profit of 69 cents per share on revenue of $668.9 million. The pros, however, were calling for a bottom line of 75 cents per share and a top line of $671.5 million.
The real red flag that did most of the damage on Thursday, however, was the announcement that GNC intended to sell 84 of its company-owned units as a prelude to the sale of around 1,000 GNC stores. That much interest in discarding company-owned stores is an indirect hint that the organization lacks confidence in its plausible future.
Symantec Corporation (SYMC)
Last but not least, cybersecurity outfit Symantec dished out a double-sized dose of bad news to SYMC shareholders on Thursday, reporting a disappointing fourth-quarter forecast, and underscoring that bad news by announcing its CEO was stepping down.
Per this morning’s news release, Symantec Corporation now believes it’s going to earn 22 cents per share on $873 million in revenue for the quarter ending in March. The top-line outlook fell short of previous guidance of $885 million to $915 million, while the bottom-line ended up short of the previously forecasted per-share earnings of 24 to 27 cents per share.
On average, analysts had been calling for a profit of 25 cents per share on sales of $901.2 million.
To what extent the tepid numbers were the reason isn’t clear, but along with the revised forecast, Chief Executive Officer Michael Brown announced he would be stepping down from his post as soon as a replacement is found.
SYMC ended the day down 7%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
