Stocks spent Tuesday's trading session in negative territory, but both the Dow Jones Industrial Average (^DJI -1.77%) and the S&P 500 (^GSPC -1.36%) indexes finished with moderate losses of less than 0.5%.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
(0.21%) |
(44.11) |
|
S&P 500 |
(0.34%) |
(8.02) |
Data source: Yahoo! Finance.
Financial stocks tracked the broader market on a day when the Federal Reserve met to consider raising interest rates. The Financial Select Sector SPDR ETF (XLF -1.17%) posted a 0.3% decline. On the other hand, bullish bets on gold continued to slam investors, as the Direxion Daily Gold Miners Bull 3X ETF (NUGT 2.79%) dove almost 9% to near its 52-week low.
Standout individual stocks on the day included Lantheus Holdings (LNTH -1.93%) and DSW (DBI -0.64%).
Image source: Getty Images.
Lantheus Holdings' stock offering
Shares of medical imaging product specialist Lantheus Holdings dove 12% after the company announced a secondary stock offering. Avista Capital Partners, which currently owns 41% of its common stock, will be selling a significant portion of its holding -- 3 million shares, to be exact.
Lantheus won't be receiving any proceeds from this deal as all the funds raised are going to Avista Capital. On the other hand, current shareholders won't be penalized with the type of dilution that would happen if the company were issuing new shares to the public itself.
Image source: Getty Images.
Still, 3 million shares amounts to 8% of Lantheus Holdings' outstanding stock count, and sale of that size would understandably drive the market price down. Investors might also be concerned about why Avista Capital is choosing to reduce its position, though the firm will still own one-third of the business after the sale is completed.
It's hard to fault Avista for its timing, given that Lantheus' stock had shot up 63% so far this year. Optimism has been building after the company beat its 2016 sales and earnings targets on strong demand for high-margin diagnostic imaging products like its Definity offering. Tuesday's stock sale news doesn't impact these encouraging business prospects, but it does point to some short-term pain for shareholders as the market digests the elevated stock supply.
DSW's holiday results
DSW shares ticked higher after the shoe retailer announced its fourth-quarter earnings results. The company met management's comparable-sales guidance, but comps still sank by a brutal 7% over the critical holiday shopping period. On the bright side, tight inventory management, paired with major cost cuts, helped produce a 22% spike in earnings per share. It was DSW's second straight quarter of improving profits following four consecutive decreases. "Our fourth quarter continued our return to year over year profitability growth," CEO Roger Rawlins said in a press release, "with top line results that met our guidance."
Rawlins and his team are now focused on getting the company back to comp-sales growth following the 3% decrease that DSW endured over the past 12 months. With customer traffic trends dropping across many shopping outlets, that won't be an easy feat. But the company hopes that initiatives like improving its merchandising and in-stock levels will help, even as it presses the slight advantage it has recently seen in the digital sales channel.
Management's guidance for the coming year isn't particularly encouraging; it projects another year of comps being flat or declining as adjusted earnings per share range between $1.45 and $1.55 compared to last year's $1.46 result.
