Despite the bullish start to the last trading day of the week, with some help from a strong durable goods orders figure for February, concerns over the looming healthcare bill vote were too much for investors to look past. The S&P 500 ended the day at 2,343.98, down 0.08%.
These three names led the charge lower, albeit for understandable reasons.
Mylan N.V. (MYL)
The 1.5% pullback Mylan suffered today wasn’t horrifying, but the backstory is a bit surprising, and a little alarming. That is, on Friday, the market leaned that pharmaceutical peer Abbott Laboratories (NYSE:ABT) had sold a huge piece of its sizeable stake in MYL stock. Specifically, Abbott sold 44 million shares — almost two-thirds — of the MYL shares it owned. That still leaves it with a 4.8% stake in Mylan, but the exit marks a significant change of heart for the drug company.
Fanning the bearish flames that burned MYL shares today is the echo of news that 81,000 of its EpiPens sold outside of the United States were being recalled.
The EpiPen is already a sore spot for consumers, who have watched the price of the life-saving drug and injector quadruple since 2008. Although Mylan has somewhat soothed those wounds, the recall puts the company back in the proverbial doghouse with some investors.
GameStop Corp. (GME)
Bad news from video game retailer GameStop isn’t unusual. But, there’s something about seeing it in print that manages to kick-start another wave of selling.
Today’s chapter in the sordid saga: The outlook is grim enough to prompt the closure of 150 stores.
The fourth-quarter results posted after Thursday’s close were compelling in and of themselves. The company earned $2.38 per share on sales of $3.05 billion, and though sales fell short of the expected $3.12 billion, the bottom line was better than the anticipated $2.29 per share of GME.
Looking ahead, however, the picture darkens. GameStop only foresees a profit of $3.25 per share this year, versus Wall Street’s expectation of $3.73. The company intends to shutdown 150 stores in 2017.
The headwind the organization faces is a migration from video games being purchased on a disc to games being sold via digital download. The recent maneuver from Microsoft Corporation (NASDAQ:MSFT) to make a Netflix-like game subscription service is just a microcosm of a bigger paradigm shift that increasingly makes GameStop unnecessary.
GME ended the day down 13.6%.
Finish Line Inc (FINL)
Finally, GME shares weren’t the only stock to get trashed on the heels of a disappointing quarterly report. Sports apparel outfit Finish Line fell short of its fourth-quarter estimates, sending FINL shares to a whopping loss of 19.5%.
For the quarter ending in February, Finish Line reported income of 50 cents per share versus expectations of 70 cents per share of FINL. Though revenue of 557.5 million was better than analyst estimates of $547.8 million, between the earnings shortfall and lackluster full-year guidance, the market couldn’t find much to like about the company.
That steep loss carried FINL to a new six-year low.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.