After being trapped in a narrow trading range for nine days, the S&P 500 finally broke out of that rut … bearishly. The close of 2157.03 was down 0.64% from Monday’s closing level. Even so, the index managed to fight its way back above some key technical floors, offering a glimmer of hope it may be able to avoid a major pullback from here.
Not every stock evaded the bears’ grip, however. Delta Air Lines, Inc. (NYSE:DAL), DISH Network Corp. (NASDAQ:DISH) and Macy’s Inc (NYSE:M) all used more than their fair share of red ink on Tuesday.
Here’s the deal.
Delta Air Lines, Inc. (DAL)
Take your pick of reasons Delta Air Lines shares were hit hard today … there was more than one.
A warning from overseas rival airline Deutsche Lufthansa AG (ADR) (OTCMKTS:DLAKY) spurred at least part of the 7.8% pullback DAL dished out on Tuesday. The German carrier said that in light of recent terror attacks in Europe, passenger volume was measurably falling. Lufthansa CEO Carsten Spohr commented:
“The terrorist attacks in Europe and also the increasing political and economic uncertainties are having a tangible impact on passenger volumes… The forward bookings, in particular for our long-haul services to Europe have declined significantly. We expect the high pricing pressure to continue.”
Although to a lesser degree, that trend could also affect U.S. carriers like Delta, and United Continental Holdings Inc (NYSE:UAL). American Airlines Group Inc (NASDAQ:AAL) was down nearly 6%. DAL led the way lower though, thanks to another dose of bad news directly from Delta Air Lines.
That news? Delta also reported its July performance to shareholders on Tuesday. Consolidated passenger unit revenue was down 7% on a year-over-year basis. Fanning the bearish flames that singed DAL was commentary from CNBC’s Dom Chu that suggested fuel costs for the airline were quietly on the rise.
DISH Network Corp. (DISH)
DISH Network is still adding radio airwave spectrum to its cache, but if today’s 8% plunge from the stock is any indication, DISH shareholders aren’t thrilled with the way the company is doing it.
The concerning news: To help fund at least part of the purchase of spectrum being auctioned off by the Federal government, DISH Network is issuing $2 billion worth of convertible debt. DISH is already sitting on sitting on $14.2 billion worth of long-term debt, and is already sitting on its existing spectrum with no apparent plans or effort to monetize it.
Macy’s Inc (M)
Last but not least, Cleveland Research Company cautioned investors on Tuesday that July sales for department store chain Macy’s saw a serious slowdown, along with peers Nordstrom, Inc. (NYSE:JWN) and Kohl’s Corporation (NYSE:KSS). All were down for the day, but in terms of market cap lost, M shares doled out the most misery with its 7% setback.
The report underscored a related report from the Department of Commerce explaining consumers were starting to dip into their savings to continue spending. Savings-supported spending is a concern for investors in that, should the purse strings tighten, things like clothing and accessories bear the brunt of those cutbacks.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
