In a move that contrasts sharply with the Federal Reserve’s impending plans to raise interest rates in step with sustained economic growth, the European Central Bank opted to lower its key rate just a bit this week, as well as prolong its stimulus efforts. Conflicted investors chose to see the glass as half empty, sending the S&P 500 down by 1.44% to a close of 2,049.62.
It could have been worse, though for owners of Principal Financial Group Inc (NYSE:PFG), Pandora Media Inc (NYSE:P) and Yahoo! Inc. (NASDAQ:YHOO), it was worse. These three names led the bearish charge.
Yahoo! Inc. (YHOO)
It’s not exactly a big secret that the web-search operator and web-services provider is struggling. But when the market is reminded of that reality in black and white, it can take a toll on YHOO shares. The market got such a reminder today.
The prod: Were Yahoo! interested in selling its search business (as has been speculated), Alibaba Group Holding Ltd (NYSE:BABA) is NOT likely interested in buying it. Indeed, Rosenblatt Securities analyst Martin Pyykkonen doubts there’s any potential suitor out there willing to pay a price for Yahoo’s search business that would actually excite YHOO shareholders.
Adding fuel to the bearish flames was the downgrade from crowd-sourced stock-rating site Vetr, which recategorized YHOO to the equivalent of a “sell” rating.
YHOO closed down nearly 4%.
Principal Financial Group Inc (PFG)
Shares of insurer Principal Financial Group fell 5% on Thursday on 2016 guidance that did anything but excite PFG shareholders. The company’s retirement and income solutions, as well as its individual life policy and specialty business lines, were all projected to be particularly disappointing.
CEO Daniel Houston explained that the muted outlooks reflected “pressure we’re going to have on 401(k) competition … We’ve got a little bit of overhang on DOL relative to contingency plans, putting those in place to make sure we’re able to absorb any sort of regulatory change in ’16 and ’17.”
Houston was referring to a pending regulatory change from the Department of Labor that could adversely impact how — and how much — insurance agents collect from customers.
Pandora Media Inc (P)
Last but not least, Pandora Media may be the name to beat in the world of web-based subscription radio, but that doesn’t mean the company is swimming in excess cash.
That’s a reality P shareholders had to digest today, when Pandora shares fell more than 11% on the heels of news that the company was raising $300 million via the issuance of (potentially diluting) convertible senior notes.
Pandora Media said the proceeds from the sale of the notes would be used for general corporate purposes, though one has to wonder if the company is gearing up for what has been described by some as an “all-out music war” with rival Spotify, which recently passed Pandora as the world’s largest online music source.
Part of that war may include the introduction of an on-demand service. Pandora announced plans to acquire a company called Rdio, which does exactly that.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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