Stocks got the new week started on a decidedly different foot than the one it finished on last week, though not on any particular news. The S&P 500 tumbled 0.7%, closing out at 2,077.07.
Energy Transfer Equity LP (ETE)
Though all stocks fell into the red today, leading the bearish charge was the energy sector. All told, gas and oil stocks lost more than 5% of their value on Monday on the heels of more than a 5% plunge in crude oil prices. Leading that bearish parade for the energy sector was Energy Transfer Equity LP, with a 15% stumble from ETE stock.
ETE has already seen more than its fair share of bearishness — even by energy stock standards — of late, largely fueled by news that comparable oil and gas company Kinder Morgan Inc. (NYSE:KMI) had seen its credit-worthiness called into question.
Those fears have grown in the meantime though, with more and more articles like this one today suggesting the dividend yield of 7.4% Energy Transfer Equity is paying simply isn’t sustainable. With oil now well under $40 per barrel, those concerns may be merited by owners of ETE.
Netflix, Inc. (NFLX)
The good news is, Netflix aims to double the number of original, exclusive television shows it offers in the coming year. The bad news it, Netflix will have to pay to have those shows made, and though there’s no denying the company’s original programming has been something of a customer draw, there’s no real assurance doubling its investment in itself will double the benefit the company enjoys from its in-house productions right now.
That’s one of the reasons NFLX shares were down more than 4% today, though it wasn’t the only reason.
Fanning those bearish flames were reports that Chief Content Officer Ted Sarandos had publicly conceded its international expansion was facing a headwind as some distributors were still getting a feel for selling usage rights with no border restrictions.
Bluebird Bio Inc. (BLUE)
Last but not least, Bluebird Bio shares got rocked on Monday after the company announced trials of one of the key drugs in its pipeline hadn’t performed as well as initially hoped.
Truth be told, the data presented at the American Society of Hematology (ASH) wasn’t terrible — the sickle cell treatment called Lentiglobin drives a small increase in normally functioning red blood cells. It just wasn’t nearly enough to offer any real hope for an approval.
The bad news was enough to prompt Bank of America/Merrill Lynch to lower its price target on BLUE from $121 to $62, and lowered its official rating on the stock from “buy” to “neutral.”
BLUE finished the day down more than 37%, at $52.25.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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