The first day back following a firmly bullish week was anything but bullish. With nothing to inspire another round of buying, the S&P 500 drifted 0.35% lower on Monday to a close of 2,268.90. That close keeps it squarely between some key support and resistance levels, as traders wait for news that will tell them which direction the undertow is pointed.
Acuity Brands, Inc. (AYI)
LED lighting company Acuity Brands may have reported record fiscal Q1 results on Monday morning, but it still didn’t meet the market’s estimates, sending AYI shares a hefty 14.7% lower.
For the quarter ending in November, Acuity Brands earned an adjusted operating profit of $2 per share on revenue of $851.2 million. That was well above the year-ago bottom line of $1.77 per share and sales of $736.6 million, but fell short of analyst estimates for earnings of $2.18 per share and a top line of $887.1 million.
CEO Vernon Nagel fanned the bearish flames that burned AYI on Monday, saying:
“We’re talking to our customers. The enthusiasm amongst our electrical contractors is still very positive, particularly for larger projects, though they do have some concern that labor shortages in certain markets will continue to influence just how much business they are able to take on.”
Davita Inc (DVA)
It wasn’t the only name in the dialysis business to take a hit on Monday. But, in terms of total damage inflicted on U.S. investors (by market cap and volume), Davita’s 3.7% tumble today is the most noteworthy.
The prod for the setback was news that the company, along with Fresenius Medical, is being scrutinized by the U.S. Attorney for the District of Massachusetts over its ties with charity American Kidney Fund.
The presumed concern that ultimately led to subpoenas is an effort from the U.S. Department of Health and Human Services to determine if the relationship discourages dialysis patients from tapping into assistance from other charities that direct those patients to use higher-paying insurance plans … as opposed to lower-paying government-sponsored plans like those from Medicare and Medicaid.
J C Penney Company Inc (JCP)
Last but not least, struggling retailer J C Penney Company was yet another name that reported lackluster holiday sales.
The news actually came out on Friday morning, though trading was light that day and not all JCP shareholders heard it. Nevertheless, J C Penney Company reported then that same-store sales slumped 0.8% during the nine-week holiday shopping span of 2016, sending JCP 3.7% that day, and pushing it another 5% lower on Monday as more investors digested the report.
The company maintains that it’s still on pace for a profitable fourth quarter despite its weak holiday performance. One of its weaker areas was women’s clothing, while appliances, cosmetics and fine jewelry did well. One particular bright spot was the retailer’s e-commerce division, which saw double-digit growth for the period in question.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.