Travel Stocks Put on Hold — Wednesday’s IP Market Recap

by Marc Bastow | August 8, 2012 5:02 pm

[1]The euphoria of a three-day market rally slowed Wednesday but did not falter as cautious optimism and subdued trading combined for essentially a flat finish on all major indices, though the Dow Jones Industrial Average and S&P 500 did officially extend their gains to four straight days.

One notable exception to the malaise was Priceline (NASDAQ:PCLN[2]), which lost a jaw-dropping $117 per share — which translates to 17%, still no small number — after it posted a decent earnings report Tuesday night, but indicated that expected growth will slow as Europeans[3], which make up a large part of Priceline’s business, put off travel.

Priceline’s warning — as well as disappointing earnings and guidance this morning by Orbitz Worldwide (NYSE:OWW[4]), which shed 26% — sent shares of rival online travel sites down on the news, with TripAdvisor (NASDAQ:TRIP[5]) and Expedia (NASDAQ:EXPE[6]) losing more than 5%, and Kayak (NASDAQ:KYAK[7]) falling nearly 4%.

The woes in the travel sector hindered the Nasdaq, which fell marginally to 3,011. But the Dow finished ahead fractionally to 13,175, while the S&P managed to stay above the 1,400 mark, closing up just ahead at 1,402.

On a slow economic news day, Fiserv forecast that nationwide home prices will dip another 1% between March 2012 and March 2013. Meanwhile, Bureau of Labor statistics showed  productivity increased 1.6% during the second quarter, while labor costs rose 1.7%.

Corporate earnings and other company reports drove individual prices during the course of the day.

Macy’s (NYSE:M[8]) shares rose over 2% as the retailer topped earnings and revenue expectations[9]. Macy’s also raised its earnings guidance for the year. Same-same store sales rose 3% while online increased 36% during the quarter.

Retailer Ralph Lauren (NYSE:RL[10]) saw its shares slip just under 1% after a

downbeat revenue forecast for Q3[11]. However, second-quarter earnings beat Street forecasts, and revenue was in line with expectations.

Same-store sales hampered McDonald’s (NYSE:MCD[12]), as the fast-food Goliath announced sales in Europe declined[13]. McDonald’s same-store sales came in flat and missed Street estimates by over 2%. The news sent MCD shares down 1.5% for the day, the Dow’s biggest loss for Wednesday.

Hewlett-Packard (NYSE:HPQ[14]) surprised investors by unexpectedly boosting its third-quarter forecast amid cost-cutting, and also announced a restructuring and $8 billion writedown. HPQ finished up more than 2%.

Thursday’s earnings releases include Advance Auto Parts (NYSE:AAP[15]), Nordstrom (NYSE:JWN[16]) and Arena Pharmaceutical (NASDAQ:ARNA[17]).

Three Up

• Dean Foods (NYSE:DF[18]): Up 39.6% ($4.92) to $17.34 (Read more here[19]).
• Opnet Technologies (NASDAQ:OPNT[20]): Up 9.6% ($2.69) to $30.68.
• Rackspace (NYSE:RAX[21]): Up 8.4% ($4.15) to $53.45.

Three Down

• Zillow (NASDAQ:Z[22]): Down 9.45% ($3.95) to $37.81.
• Arch Coal (NYSE:ACI[23]): Down 6.35% (47 cents) to $6.93.
• Fossil (NASDAQ:FOSL[24]): Down 4.9% ($4.47) to $87.30 (Read more here[25]).

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities.

Source URL: https://investorplace.com/2012/08/wednesdays-ip-market-recap-pcln-oww-trip-expe-kyak-m/

---