Whether political turmoil was the actual reason or just an excuse for traders to dump their stocks en masse today is irrelevant. It happened, and now with the indices starting to break under key technical levels, it may be tough to stop the overdue pullback. The S&P 500 ended the day at 2,438.21, down 1.45%.
That was nothing compared to the pain owners of Dillard’s, Inc. (NYSE:DDS) , Nvidia Corporation (NASDAQ:NVDA) and NetEase Inc (ADR) (NASDAQ:NTES) suffered today, however. These three names each used more than their fair share of red ink, albeit for understandable reasons.
Here’s what traders need to know.
NetEase Inc (ADR) (NTES)
The good news is, Chinese internet giant NetEase turned a profit last quarter on more sales growth. The bad news is, shareholders didn’t care, opting to send NTES shares to a loss of 9.8% on Thursday after the company came up short of expectations.
For the quarter ending in June, NetEase managed to top revenue estimates of $1.9 billion by producing $1.97 billion worth of sales. The bottom line of $3.86 per share, however, fell short of analysts’ outlooks. In simplest terms, the market is concerned that even though the company’s growing, margins — particularly on the adverting front — are dwindling.
NVIDIA Corporation (NVDA)
Don’t look for a specific reason Nvidia shares fell 4.3% on Thursday, because you won’t find it. You have to piece together several factors to explain it, not the least of which is that the market got spooked about heightened tensions with North Korea. The market’s recent high-flyers (and NVDA is certainly one of them, by virtue of its 58% gain since April) make for the first profit-taking targets when things start to get a little scary.
There’s also the not-so-small matter that NVDA was slated to report its second-quarter numbers after the closing bell rang. Investors just weren’t quite convinced the results would be solid enough to keep the stock propped up … particularly with the broad undertow starting to move in a bearish direction.
Dillard’s, Inc. (DDS)
Last but not least, just when you think it can’t get any worse for retailers, it gets worse.
Dillard’s was today’s disappointment from the industry, reporting sales that just topped estimates, but earnings that fell well short of expectations. It wasn’t just a shortfall either. Dillard’s reported a loss of 58 cents per share, versus expectations for a profit of 35 cents per share of DDS. It was a legitimate, operation loss too, and not just one resulting from a one-time expense.
It’s not entirely unusual for a retailer to report a loss in the quarter immediately after the busy holiday shopping period at the end of the year, as foot traffic falls, and consumers are content with their gifts for at least a while. To see a loss in the subsequent quarter though — mostly driven by steep markdowns in this case — is a major red flag.
DDS ended the day down a whopping 15.9%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.