This Is the Reason the S&P 500 Continued Its Slide

Economic problems can only be swept under the rug for so long before investors begin to trip on the rug. That seems to be the case in Europe, where large rallies against further austerity measures have erupted in both Spain and Greece. As my Foolish colleague Alex Dumortier noted earlier this morning, Spanish 10-year bonds are back above 6%, having their worst day in more than a month. If we've learned anything, it's that there's no quick solution to this mess.

For the day, the S&P 500 (INDEX: ^GSPC  ) ended decisively lower by 8.27 points (0.57%) to 1433.32. Let's take a look at a few companies that had a particularly large impact on the S&P 500 today.

Electronic-parts manufacturer Jabil Circuit (NYSE: JBL  ) was the disaster du jour for Wednesday, losing nearly 10% after a dismal fourth-quarter report and upcoming forecast. Jabil's short-circuit included a 28% decline in fourth-quarter profits because of lower demand and rising expenses. Looking forward, the components provider expects first-quarter earnings of $0.51 to $0.62, which is well below the $0.67 Wall Street had been looking for. Today's move lower may represent a decent buying opportunity, however, as Jabil's CEO, Timothy Main, was recently named of one of the 10 best mid-cap CEOs by Chiefest.com.

Homebuilders also had a particularly rough day following the release of disappointing new-home sale data - but given how much they've run, perhaps a pullback was written in the cards. Both Lennar (NYSE: LEN  ) , which boasts the highest homebuilding margins in the sector, and D.R. Horton (NYSE: DHI  ) , America's largest homebuilder, dipped 4.5% and 3.9%, respectively. Data from July suggests homes are selling at an annual rate of 373,000, the highest since April 2010. Keep in mind, though, that this is still well below the housing sector's historical average, and a far cry from the 1.4 million in annual sales reached in 2005.

Bucking the trend and receiving the gold star for the day is dairy-products company Dean Foods (NYSE: DF  ) . Dean finished the day better than 5% higher after it announced that it's considering a possible sale of its Morningstar dairy division. Responsible for producing coffee creamers and various blended beverages, Dean thinks Morningstar would be a hot commodity, although it hasn't exactly identified a buyer for the business yet. Dean was also clear that a sale would be made only if it maximized shareholder value.

Duck and cover? Not quite ...
After two down days in the market, the doomsday pundits are out in full force. But you don't need to make like an ostrich and bury your head in the sand. Take this time to get your copy of our latest free special report that highlights three Dow dividends you need to have and find out why stable companies and solid dividends are a smart strategy to bucking any short-term market mayhem. Click here to get your copy.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Dean Foods. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2033164, ~/Articles/ArticleHandler.aspx, 10/25/2014 9:54:29 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement