While trade war fears seemed to ease on Thursday, propelling the major indexes to significant gains, Friday was a different story. President Trump said this morning that talks with China planned for next month could be called off following an escalation of trade tensions this week.
The Dow Jones Industrial Average (^DJI 0.40%) and the S&P 500 (^GSPC 1.02%) suffered losses, although they both recovered a bit in the afternoon.
Today's stock market
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow |
(0.34%) | (90.75) |
|
S&P 500 |
(0.66%) | (19.44) |
Data source: Yahoo! Finance.
As for individual stocks, ridesharing giant Uber Technologies (UBER -0.38%) slumped following a disappointing quarterly report that featured a massive loss and sluggish growth, and toy maker Mattel (MAT -0.60%) dropped after the company pulled a planned bond sale.
Image source: Getty Images.
Uber reports a gargantuan loss
Shares of Uber declined 6.8% after the ride-hailing specialist's second-quarter report fell well short of expectations. Revenue of $3.17 billion missed analyst estimates by $220 million, and a loss as reported under generally accepted accounting principles (GAAP) of $4.72 per share was far larger than what Wall Street had expected.
Total revenue grew by 14% year over year, but the core ridesharing business struggled. Ride-hailing revenue was up just 2% year over year to $2.29 billion. Uber Eats, the company's food delivery service, enjoyed 72% growth, producing revenue of $595 million and driving much of the company's overall revenue growth.
That $4.72-per-share loss works out to a net loss of $5.2 billion. About $3.9 billion of that was due to stock-based compensation expenses mostly related to its initial public offering. But even backing out that item, Uber lost a lot of money during the second quarter.
"While we will continue to invest aggressively in growth, we also want it to be healthy growth, and this quarter we made good progress in that direction," said CFO Nelson Chai in prepared remarks included in the earnings release. Given the stock's plunge, the market seems to disagree.
Drama at Mattel
Shares of Mattel plummeted 15.8% after the company abruptly canceled a planned bond sale on Thursday evening. The bond offering, which was set to close on Thursday, was to be used to refinance bonds due October 2020. The toy maker now plans to refinance those bonds prior to maturity.
The cancellation was due to an anonymous whistleblower letter Mattel was made aware of on Aug. 6. "To provide the Company with an opportunity to investigate the matters set forth in the letter, the offering of the Company's 6.00% Senior Notes due 2027 that was scheduled to close on August 8, 2019 has been terminated," reads Mattel's SEC filing.
The nature of the whistleblower letter is unclear, but Mattel canceling its bond sale is a drastic action that suggests that the complaint may be quite serious. Today's rout brings the stock's total loss since peaking in 2014 to 76%.
