Hearing that the Federal Reserve was plenty gung-ho for a December rate hike last month even in the shadow of economic concerns, investors took that bullish ball and ran with it on Wednesday. By the time the closing bell rang, the S&P 500 was up 1.62%, at 2,083.58.
It wasn’t a bullish day for all stocks, however. Sprint Corp (NYSE:S), Target Corporation (NYSE:TGT) and Qualcomm, Inc. (NASDAQ:QCOM) all finished the day unusually deep in the red, though for understandable reasons.
Qualcomm, Inc. (QCOM)
It’s not the first time Qualcomm or QCOM investors have heard it, but yesterday was the first time they had seen antitrust claims turn into actual charges.
The official complaint didn’t come from within the United States, though. It was South Korea’s Fair Trade Commission that said Qualcomm violated the nation’s competition laws in regards to the way it licenses its technology.
Qualcomm denies any wrongdoing, of course, flatly saying:
“The allegations and conclusions contained in the ER are not supported by the facts and are a serious misapplication of law…. Device level licensing is the worldwide industry norm, and Korean companies have long enjoyed the benefits and protections of access to our patents, which cover essentially the entire device.”
But that did little to soothe investor worries. QCOM closed down more than 9% for the session.
Sprint Corp (S)
It was just three months ago the market was cheering the generous plan from Sprint to allow users to continually upgrade their iPhone for just a small nominal fee. But, in the shadow of a disappointing earnings report that suggested the wireless service provider was giving away more than it was gaining, S investors have become less than thrilled with the premise. That’s why S stock was down 9% today — the company unveiled yet another customer offer that could end up doing more harm than good.
The specifics: On Wednesday, Sprint announced it would lower its monthly rates to half of what its competitors were charging to those cell phone users who defected from T-Mobile US Inc. (NASDAQ:TMUS), Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) by Jan. 7.
It’s an alluring deal to be sure, but clearly not one that impressed the market. It’s so generous that it comes across a little desperate.
Never even mind the fact that Sprint is getting real low on cash, real fast.
Target Corporation (TGT)
Last but not least, Target Corporation may have pumped up its bottom line last quarter, but disappointing elements of its third-quarter numbers heading into the all-important holiday shopping season spooked TGT shareholders.
Last quarter, Target earned 86 cents per share on $17.61 billion. Both were up from year-ago levels, and the bottom line of 86 cents per share of TGT stock was in line with expectations. Sales, however, came up short of the anticipated $17.63 billion.
The bigger concern was the slowdown in online sales.
The company at one point had predicted internet commerce would grow by 30% last quarter, but it was only up 20% on a year-over-year basis. In light of the fact that 2015 should be the biggest year ever for online holiday shopping while Target’s online efforts are slowing down, TGT finished the day down more than 4%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
