Wednesday’s gain served as a seed of hope that Tuesday’s sizeable stumble was just a fluke. It’s looking less like a fluke now though. Thursday’s loss of 0.86% for the S&P 500 left the index at 2,419.7, which was within reach of Tuesday’s low, and within reach of a chain-reaction selloff. Hawkish comments from foreign central banks spooked most traders, who are increasingly fearful of what that may mean for the U.S. dollar.
Fred’s, Inc. (NASDAQ:FRED), Physicians Realty Trust (NYSE:DOC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) shareholders bore the brunt of that scare, with these three names doing the most damage to investors.
Here’s the deal.
Advanced Micro Devices, Inc. (AMD)
For the second day this week shares of computer-technology outfit earned a spot on the daily worst-three list, with today’s setback for AMD dragging it 4.7% lower.
The ultimate prod for the selling wasn’t easy to identify, though it can ultimately be attributed to broad weakness in the tech sector. Overextended FANG names like Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) and Netflix, Inc. (NASDAQ:NFLX) both fell more than 2% in Thursday’s action, easily infecting most other names in the tech sector.
Still, AMD has lingering problems specific to it. Up more than 300% since the end of 2015 in anticipation of a much-needed turnaround, Advanced Micro Devices has yet to actually justify such a runup. Investors are hopeful its new Vega GPUs and Ryzen CPUs will be a hit, but the market is starting to wonder if the stock got a little too far out in front of actual results.
AMD is down 11% for the week.
Physicians Realty Trust (DOC)
Sometimes, when the market thinks an organization can put the money to good use by deploying that capital effectively, issuing new shares can be interpreted as a bullish event.
This is not one of those times.
On Thursday, Physicians Realty Trust announced it would be issuing 20 million shares of common stock at a price of $20.40, for total net proceeds of $391 million. The news sent DOC 8.4% lower.
The issuance’s funding will primarily be used to pay down existing debt. While the new debt may be offered on more attractive terms than its existing debt, DOC shareholders are still seeing revenue growth slow down at the same time net income has started to shrink. Refinancing still doesn’t solve the bigger problem the healthcare REIT faces, and existing investors are concerned about the looming dilution.
Fred’s, Inc. (FRED)
RAD shareholders weren’t the only big losers of that soured deal though. Smaller rival Fred’s, which was expecting to buy as many as 1200 Rite-Aid units the FTC wasn’t expected to let Walgreen’s keep for itself, saw its shares fall 22.8% when the Walgreens/Rite Aid deal fell through, negating the prospective deal between Walgreens and Fred’s altogether.
Fanning the bearish flames that burned FRED today was a rather dramatic downgrade. Deutsche Bank, apparently counting on the Walgreens union with Rite Aid to pan out to Fred’s benefit, lowered its price target on FRED from $16 to $8.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.