The terrorist bombing in Brussels, Belgium Tuesday morning translated into a bearish start to Tuesday’s trading. But, by the time the closing bell rang, the bulls almost defiantly drove stocks back to near-breakeven levels. The S&P 500 finished the day at 2049.8, down .09%.
Not every name joined in on the rebound effort, however. Barclays PLC (ADR) (NYSE:BCS), Dean Foods Co (NYSE:DF) and Royal Caribbean Cruises Ltd (NYSE:RCL), for instance, were content to remain in the red on Tuesday.
Barclays PLC (ADR) (BCS)
Already fighting an uphill battle since the middle of last year, UK-based bank and investment services outfit Barclays fell nearly 4% today following a key downgrade.
HSBC downgraded BCS from a “Hold” to a “Buy,” cutting its price target by more than 17% as well. Although HSBC appreciates what Barclays is doing in the way of restructuring, it doesn’t like the fact that Barclays recently cut its dividend payment plans for 2016.
Goldman Sachs also lowered its price target on BCS, though it’s worth noting that both Goldman and HSBC still have targets greater than the current value of Barclays shares.
Dean Foods Co (DF)
Dean Foods shares lost more than 12% of their value on Tuesday, not because of any company misstep, but because a competitor had entered one of its arenas. And it wasn’t just any competitor. The new name Dean Foods has to contend with on the dairy supply front is none other than the world’s biggest retailer, Wal-Mart Stores, Inc. (NYSE:WMT).
The news actually came out last week … Wal-Mart will be establishing a milk-processing plant in Ft Wayne, Indiana.
Though specific revenue numbers weren’t discussed, the company made no bones about the fact that the maneuver would disrupt the current milk market. The press release explained:
“By operating our own plant and working directly with the dairy supply chain in the Midwest, we’ll further reduce operating costs and pass those savings on to our customers so that they can save money … This facility is an example of how we are always finding efficiencies within the supply chain to deliver everyday low prices and high quality groceries.”
The news took a small toll on DF yesterday, but investors didn’t quite digest the gravity of the situation until today.
Royal Caribbean Cruises Ltd (RCL)
In light of the terrorist attack in Belgium and the ensuing clamp-down on travel (voluntary or otherwise), it doesn’t come as a surprise the transportation stocks struggled today. What did come as a surprise, however, was that airline stocks — arguably the most vulnerable to such attacks — weren’t the worst of the worst. That dubious honor belongs to the maritime cruise line industry, with Royal Caribbean Cruises leading the way.
The potential impact the threat of more terrorist attacks has on vacation-taking isn’t clear.
It’s usually wiped away rather soon. As Royal Caribbean Cruises CFO Jason Liberty explained during a conference call held in early February, “We did experience a softening in North American demand for a short period after the Paris attacks in November, and there was a minor drop in bookings from European-sourced markets [but the company saw] demand quickly return to typical levels.”
With a second terror attack in just five months, however, re-sending a message that anyone can become a victim at any time, Tuesday’s bombing in Brussels may not be shrugged off as easily.
Royal Caribbean Cruises lost nearly 3% of its value today. Rival Carnival Corp (NYSE:CCL) wasn’t far behind RCL on Tuesday, losing more than 2% itself.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
