The bulls tried as hard as they could to get the new week started on a bullish note, but it wasn’t meant to be. By the time the closing bell rang, the S&P 500 up a scant 0.09% to end the session at 2,427.43. That’s still below a key support level for the index.
It was much, much worse for owners of Cara Therapeutics Inc (NASDAQ:CARA), Abercrombie & Fitch Co. (NYSE:ANF) and Best Buy Co Inc (NYSE:BBY) though. These three names were battered and bruised, but for understandable reasons.
Here’s what traders need to know.
Best Buy Co Inc (BBY)
As if electronics retailer Best Buy hasn’t already suffered enough at the hands of e-commerce icon Amazon.com, Inc. (NASDAQ:AMZN), tech-news website Recode reported today that Amazon was moving into another piece of Best Buy’s turf. That is, Amazon has developed a network of installers that will setup smart homes — using Alexa as the centerpiece — in consumers’ houses.
It was jarring to BBY shareholders for one simple reason … it takes aim at Best Buy’s “Geek Squad” arm, which dispatches technicians to people’s homes and business to solve a variety of tech-related problems. Although the scope and size of Amazon’s new service is quite limited right now, it serves as the groundwork for an operation that could eventually crimp Geek Squad’s contribution to the parent company.
BBY ended the day lower by 6.3%.
Abercrombie & Fitch Co. (ANF)
Another struggling retailer also saw its stock plunge today, though its investors can’t blame Amazon (at least not as much) for its meltdown. Shares of tween-fashion chain Abercrombie & Fitch fell 21.1% on Monday following reports that it won’t sell itself after all.
Abercrombie has been unraveling since 2013, when sales peaked. Earnings also began to whither at that time, and the retailer has slipped into the red for the better part of the past four quarters. It’s unlikely it would be unable to stop that bleeding on its own.
The company was in talks with a potential suitor, which was figured by some as the only way for the brand name to survive at all. Apparently it couldn’t come to sale terms Abercrombie & Fitch liked though, as it walked away from those talks today.
Cara Therapeutics Inc (CARA)
Finally, just when it looked like biotech stock Cara Therapeutics might have a chance of bouncing back to life, the sellers begin the second wave of selling.
The first wave began on June 30th, with CARA plunging 40% following reports that CR845, for the treatment of pain in patients with hip or knee pain, didn’t perform as well as hoped in its Phase 2b trials.
Shares languished a few days after that, with some concluding the drug in question still had some potential value. Having had some time to think about it over the weekend though, the 10.4% plunge CARA booked on Monday suggests traders don’t see enough remaining value in CR845 to stick with the stock.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.