Unsure if higher-than-expected unemployment claims was good news or bad news (in that rising joblessness gives the Federal Reserve room to delay any impending rate hike), traders mostly spent Thursday on the fence. The S&P 500‘s close of 2064.11 was a mere 0.02% loss, materializing after the index had tested a key floor as well as a critical technical ceiling, and squarely between the day’s high and the day’s low
Not every stock sidestepped a setback on Thursday though. Kohl’s Corporation (NYSE:KSS), Micron Technology, Inc. (NASDAQ:MU) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX) were all made targets early on in today’s trading.
Here’s what investors need to know.
Kohl’s Corporation (KSS)
In light of yesterday’s horrible first-quarter results from department store chain Macy’s, Inc. (NYSE:M), it only stood to reason peer and rival Kohl’s performed poorly. The retailer didn’t even hold up to those lowered expectations.
Last quarter (the company’s first fiscal quarter of 2016), Kohl’s earned 31 cents per share on $3.97 billion worth of revenue. Analysts, however, were calling for a bottom line of 37 cents per share of KSS and sales of $4.13 billion. Same-store sales were down 3.9%.
The weak numbers underscored a growing concern from analysts regarding retail in general. Cowen and Company analyst Oliver Chen commented, “Apparel is fighting an uphill battle. As evidenced by surprisingly weak April trends at L Brands, pressure at Macy’s and department stores, and specific issues at Gap, retail is in the midst of a transition.”
KSS finished the day down more than 9%.
Micron Technology, Inc. (MU)
Already cast in a bearish light thanks to mostly lackluster earnings news and outlooks for technology companies, computer memory maker Micron Technology was readily vulnerable today to a double dose of pessimism.
Sterne Agee CRT drew the first blood, pointing out today the company’s high-bandwidth memory hasn’t made it to the market fast enough to give computer and chipset makers time and ample supply to integrate the technology into their new products. Though still on the way, MU investors have no clear idea when Micron will roll out HBM in bulk, and differentiate itself from other memory makers.
Fanning the bearish flames for MU on Thursday were reminders that memory chip prices continue to fall.
Valeant Pharmaceuticals Intl Inc (VRX)
Last but not least, as if Valeant Pharmaceuticals hadn’t been beaten down enough by market contempt for everything it stands — well, once stood — for, VRX fell another 5% today when its efforts to start making amends were still critiqued as too little.
As promised, Valeant Pharmaceuticals did rein in prices it was charging hospitals for several of its key drugs. As these hospitals examined their costs though, they found discounts were small to nonexistent for most, with most orders not being large enough to qualify for any meaningful discount whatsoever.
There is recourse for these hospitals. Another hearing like the one that prompted the company’s first pledge of lower prices could be held, widening the degree and eligibility for Valeant Pharmaceuticals’ discount program.
For VRX shareholders though, a more generous discount program will further shrink an already pressured top and bottom line.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
