Although they got nowhere near recovering the ground that was lost in the midst of Thursday’s selloff, the bulls at least managed to stop the bleeding on Friday. On the heels of tempered inflation, the S&P 500 Index managed to gain 0.13% to end the week at 2,441.32.
Still, it was the worst weekly performance since March, and some stocks didn’t even join the modestly bullish party. J C Penney Company Inc (NYSE:JCP), Mylan N.V. (NASDAQ:MYL) and Snap Inc (NYSE:SNAP) were all deep in the red today.
Here’s what traders need to know about each setback.
Snap Inc (SNAP)
Investors were willing to give Snap, the parent company of Snapchat, a pass after its first earnings report in May. After all, it’s a young company, and CEO Even Spiegel is young as well. Stumbles can be expected.
SNAP shareholders can’t brush off another disappointing quarter report though. That’s exactly what they got after Thursday’s close, when the organization’s top and bottom line both missed estimates. Worse, user growth was once again anemic, with Snapchat only drawing in another 7.3 million regular users … and the company had to spend heavily to garner them.
With the stark reality that Snapchat just isn’t the huge draw it was expected to be a few months ago, investors sold their SNAP shares today, en masse. Today’s 13.8% setback for Snap stock places it 28% below March’s IPO price, and within easy reach of its record-low levels hit earlier this month.
Mylan N.V. (MYL)
Don’t look for a specific reason shares of generic drug giant Mylan fell 4.4% on Friday — there’s not a new one. Rather, today’s weakness was simply a delayed reaction to the release of the company’s second-quarter numbers posted on Wednesday.
Although sales as well as earnings fell short of estimates, MYL shares held their ground on Thursday. With another night to sleep on it though, shareholders decided the glass was half-empty.
Fanning those bearish flames was a less-than-thrilling outlook for the generic drug industry from RBC Capital Markets analysts Randall Stanicky and Ashley Ryu. The pair said on Thursday that approval of competing generic drugs were likely to accelerate in the near future, taking a bit out of Mylan’s bottom line.
J C Penney Company Inc (JCP)
Finally, although for a few quarters it looked like struggling retailer JC Penney might be able to dig itself out of a hole, in light of the company’s recently reported second-quarter numbers.
For the quarter ending in July, J C Penney lost 9 cents per share on revenue of $2.96 billion. Although the top line was better than the expected $2.84 billion, the loss was larger than the 5-cent per-share loss analysts were calling for. Same store sales were also down 1.3% in the second quarter, calling into question the value of recent store closures.
The persistent losses have forced the market to digest the possibility that the turnaround effort may be failing. The end result was a 16.6% setback for JCP shares today, which carried the stock to record-low levels.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
