Stocks got started on a fairly bullish foot on Thursday, but it wasn’t meant to last. Despite several encouraging earnings reports this morning, traders are again starting to question how much more upside is plausible. The S&P 500 index ended the session at 2,475.42, down 0.10%.
It could have been worse though. You could have owners Advanced Micro Devices, Inc. (NASDAQ:AMD), Spirit Airlines Incorporated (NASDAQ:SAVE) or AstraZeneca plc (ADR) (NYSE:AZN). These three stocks dished out enormous pain to their investors today, albeit for understandable reasons.
AstraZeneca plc (ADR) (AZN)
Realistically speaking, the 14.9% setback AstraZeneca shares suffered today was likely overdone. On the other hand, who can blame AZN shareholders for being spooked? A great amount of hope had been placed on the success of the so-called Mystic trial, and when it was found to be ineffective compared to alternatives, the year-to-date gain of 24% driven by the prospect began to unwind.
The Mystic trial was examining the efficacy of a combination of Imfinzi and Imfinzi as an immunotherapy for non-small cell lung cancer. It’s no better than chemotherapy, which remains the go-to option. The company told AZN shareholders it will continue to work with the combo drug as treatments for other cancers or indications, but the market isn’t enthusiastic about those prospects.
Shares of Bristol-Myers Squibb Co (NYSE:BMY) also fell on Thursday, in sympathy with AZN. Bristol-Myers is developing a very similar combination drug of its own that takes aim at the same ailment.
Spirit Airlines Incorporated (SAVE)
The good news is, Spirit Airlines posted a better profit than it was expected to last quarter. The bad news is, the company conceded it was being forced to offer generous discounts to remain competitive with peers and rival airlines.
For the quarter ending in June, Spirit Airlines earned $1.14 per share on revenue of $701.7 million. Analysts were only calling for a profit of $1.11 per share of SAVE stock, but were also modeling revenue of $702.1 million. Things could get worse before they get better too. Spirit’s Chief Commercial Officer Matt Klein said “the competitive environment has spread to a larger number of markets at deeper discount levels {as} our competitors resort to an unusual level of discounting.”
SAVE ended the day down 18%.
Advanced Micro Devices, Inc. (AMD)
Last but not least, don’t look for a specific reason Advanced Micro Devices shares lost 4.3% of their value today — you won’t find it. Rather, the lull is largely lingering bearish follow-through from Wednesday’s intra-day rollover.
The initial response to the company’s Q2 report posted following Tuesday’s close was bullish. It was short-lived strength though, as AMD stock faded by mid-day. With another night to sleep on it, the bears decided they weren’t done.
It’s not a move that should be intercepted with great alarm. Advanced Micro Devices was up nearly 50% between early May and Wednesday’s close, making it an easy profit-taking target. On the other hand, a handful of analysts and onlookers have voiced some doubts about the foreseeable future. Citigroup’s Christopher Danely, for instance, still contends AMD stock could slide all the way back to $5 per share in that even with its recent market share progress, it’s still losing a lot of money.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
