Stocks struggled to find direction on Thursday, with traders hesitant to tack on any more gains following Tuesday and Wednesday’s sizeable advances. By the time the closing bell rang, the S&P 500 was at 2090.10, down a mere 0.02% for the day.
Here’s what traders need to know about each setback.
Abercrombie & Fitch Co. (ANF)
Beleaguered retailer Abercrombie & Fitch once again posted lackluster quarterly numbers, sending ANF shares down a jaw-dropping 15.7%.
Last quarter, the retailer booked a loss of 53 cents per share on sales of $685.5 million. Analysts had been expecting revenue of $710.3 million, and a loss of only 51 cents per share of ANF. Sales rolled in 4% lower than the comparable quarter’s sales a year earlier, but earnings improved dramatically. Same-store sales also fell 4% on a year-over-year basis.
The numbers extended a long string of disappointing results from struggling Abercrombie & Fitch, further convincing ANF shareholders that the company has simply failed to remain relevant with its tween and young-adult consumer market.
Carnival Corp (CCL)
Talk about being a victim of circumstances! Cruise line name Carnival saw its stock fall more than 4% on Thursday, though it didn’t do anything wrong. Rather, the market inferred something Morgan Stanley said about rival Royal Caribbean Cruises Ltd (NYSE:RCL), presuming it too could apply to CCL.
In short, Morgan Stanley lowered its price target on RCL today, from $99 to $80, on steep reductions in cruise prices. Analysts found current ticket prices are down between 10% and 20% from last year’s prices around this time, which would not only lead to a sizable hit for the top line, but an even bigger hit on Royal Caribbean Cruises’ bottom line.
Carnival has been struggling with stagnant revenue since 2011, making CCL a relatively easy target at the first sign of trouble for the industry.
Ionis Pharmaceuticals Inc (IONS)
Last but not least, proving once again that small-cap biotech stocks hyper-focused on a tiny pipeline are overloaded with risk, Ionis Pharmaceuticals shares took a massive near-40% drubbing on Thursday after now-former research and development partner GlaxoSmithKline plc (ADR) (NYSE:GSK) backed out of a trial already underway.
The drug in question was Ionis’ TTR, for the treatment of a rare condition known as amyloid cardiomyopathy (FAC) … a type of TTR amyloidosis. The drug, ready to move into phase 3 testing, was put on hold by the Food and Drug Administration last month until GlaxoSmithKline answered more questions about the therapy, and the likelihood it could cause low platelet levels.
That hold was lifted, but perhaps reading between the lines, GlaxoSmithKline opted to waste no more time or resources on the TTR therapy.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.