Shrugging off Tuesday’s political turmoil and interpreting Federal Reserve chairperson Janet Yellen’s congressional testimony as dovish, traders were plenty bullish on Wednesday. The S&P 500 index ended the session at 2,443.25, up 0.73%, and within reach of record highs.
Not every name was able to jump on board the bullish train though. Centurylink Inc (NYSE:CTL), MSC Industrial Direct Co Inc (NYSE:MSM) and Harley-Davidson Inc (NYSE:HOG) all made their way considerably lower, though for understandable reasons.
Here’s what investors need to know.
Harley-Davidson Inc (HOG)
The 3.1% loss Harley-Davidson shares suffered today wasn’t devastating even though it was one of the market’s weaker performers. But, in light of the fact that HOG was already down nearly 9% between June’s high and Monday’s close, another setback has made owning the stock almost intolerable.
Bernstein did the deed, downgrading Harley-Davidson from an “Outperform” to a mere “Market perform.” The more damning aspect of the downgrade, though, may have been the cut in the firm’s price target. Bernstein analysts David Beckel and Apple Li lowered their target from $62 to $55, explaining:
“… we fine-tuned our motorcycle demand model and now believe demographic shifts and a stagnating economy will keep unit sales growth in the US at flat to slightly lower levels for the next five years. Our data suggests the younger Gen Y population is adopting motorcycling at a far lower rate than prior generations.”
MSC Industrial Direct Co Inc (MSM)
The good news is, MSC Industrial Direct met its fiscal third-quarter earnings estimates. The bad news is, the company’s guidance was less than thrilling. MSM investors saw the glass as half-empty.
For the quarter ending in late-May, turned revenue of $743.9 million into earnings of $1.09 per share. The bottom line was in line with analysts’ outlooks, and the top line topped the average outlook of $737.8 million.
The fourth quarter isn’t going to be quite as impressive though … at least on the earnings front. MSM is expecting between $732 million and $746 million, which was better than analyst outlooks. Its profit outlook of between 97 cents and $1.01 per share, though, is less than the experts’ estimates … a lot less. They were collectively calling for profits of $1.06.
MSM shares ended the day down 14.1%.
Centurylink Inc (CTL)
Last but not least, like the selloff HOG suffered today, the 3.2% tumble shares of small-cap telecom name Centurylink wasn’t a killer. Coupled with the 16% pullback CTL had dished out between its June high and yesterday’s close though, another wave of selling only poured salt in a painful wound.
The prod for the pullback was news that the state of Minnesota was suing the company over its billing practices. In short, Minnesota’s attorney general claims Centurylink has been overcharging customers, not honoring rates offers by its sales people.
The suit didn’t come as a complete surprise to most CTL shareholders, but there’s still something about seeing the news of a lawsuit in print to work a stock lower.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.