Stocks Dip on Pre-Earnings Jitters — Tuesday’s IP Market Recap

by Marc Bastow | January 8, 2013 5:04 pm

InvestorPlace Market Recap[1]The worry stick shifted Tuesday, with market watchers turning their attention away from America’s debt ceiling and toward what’s expected to be a dour fourth-quarter earnings season[2].

Q4 earnings growth forecasts have slid from 9.2% in September to the most recent 2.4%; and the trading day before Alcoa‘s (NYSE:AA[3]) opening salvo reflected that pessimism. The Dow Jones Industrial Average finished the day down 0.41% at 13,328.85, the S&P 500 fell 0.32% to 1,457.15, and the Nasdaq dropped 0.23% to 3,091.81.

To its credit, Alcoa “officially” kicked things off the right way after the bell. The aluminum giant reported a profit of 21 cents per share, exceeding the 18 cents in the year-ago period, with most of those gains coming on cost-cutting. AA shares were up just more than 1% in early after-hours trading.

On Tuesday morning, Monsanto (NYSE:MON[4]) jumped the gun with Q4 earnings that bested estimates, and the company also raised future guidance. Shares jumped up more than 2%, touching a four-year high of around $100 per share before settling in at just over $98.

Shares of video game retailer GameStop (NYSE:GME[5]) dropped more than 6%[6] after the company announced a big dip in same-store sales for the holiday season. GME’s problems were shared across the video game sector, which saw Electronic Arts (NASDAQ:EA[7], -4.7%), Take Two Interactive (NASDAQ:TTWO[8], -3.1%) and Activision Blizzard (NASDAQ:ATVI[9], -1.7%) all drop on the day.

Shares of Sears Holdings (NASDAQ:SHLD[10]) declined more than 6% after the retailer announced that CEO Louis D’Ambrosio is stepping down[11] for family reasons, leaving hedge fund manager and Sears chairman Edward Lampert as the new CEO. In the absence of any particular news, shares of fellow retailer JCPenney (NYSE:JCP[12]) shed nearly 5%.

Yum! Brands (NYSE:YUM[13]) sank more than 4% after the restaurant operator said its fourth-quarter sales in China would be weaker than expected thanks to, among other things, concerns over food safety standards.

Meanwhile, Verizon (NYSE:VZ[14]) shares sank just over 2% after announcing[15] its interest in buying Vodafone‘s (NASDAQ:VOD[16]) 45% stake in their partnership. VOD finished down just more than 1% on the news.

Netflix (NASDAQ:NFLX[17]) also dropped 2% after inking a deal[18] with Time Warner (NYSE:TWX[19]) that will bring eight television shows to the internet subscription service’s offerings. TWX gained just more than 2%.

Finally, Target (NYSE:TGT[20]) announced it will continue its policy of matching prices[21] from rival stores — including those from Best Buy (NYSE:BBY[22]) and Walmart (NYSE:WMT[23]) — that it started during the holiday season. Investors were unimpressed; the stock fell just over 1% Tuesday.

Three Up

Three Down

Marc Bastow is an Assistant Editor at As of this writing, he was long VZ and TWX.

  1. [Image]:
  2. dour fourth-quarter earnings season:
  3. AA:
  4. MON:
  5. GME:
  6. dropped more than 6%:
  7. EA:
  8. TTWO:
  9. ATVI:
  10. SHLD:
  11. announced that CEO Louis D’Ambrosio is stepping down:
  12. JCP:
  13. YUM:
  14. VZ:
  15. after announcing:
  16. VOD:
  17. NFLX:
  18. inking a deal:
  19. TWX:
  20. TGT:
  21. policy of matching prices:
  22. BBY:
  23. WMT:
  24. ARNA:
  25. CELG:
  26. HLF:
  27. CY:
  28. CBB:
  29. ACI:

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