Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why GameStop, American Railcar Industries, and Tower Group International Dropped Today

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Bullish economic news helped the Dow finally hold onto the 16,000 level at the end of the day, even after three previous forays had failed to result in a close above that figure. Even amid the general enthusiasm over stocks as the year draws to a close, GameStop (NYSE: GME  ) , American Railcar Industries (NASDAQ: ARII  ) , and Tower Group International (UNKNOWN: TWGP.DL  ) all fell sharply. Let's figure out why these stocks dropped so badly and what their moves could mean for the broader market.

GameStop dropped 7% as investors focused on disappointing projections for its fourth-quarter earnings. Although same-store sales soared more than 20% in the third quarter on an overall 18% revenue gain, GameStop gave a range of earnings guidance that was below the current investor consensus. The big wildcard, though, is that with new consoles becoming available for this holiday season, it's hard to project just how big customers' appetites for the new offerings and the games to go with them will be.

American Railcar Industries also fell 7% as analysts at Raymond James downgraded it and several other railcar companies. The analysts cited concerns that huge demand for tank cars to ship crude will lead to overproduction, which in turn could lead to weaker pricing in the future. In the long run, the big question will be whether a bounce in the commodities markets will boost demand for nontank cars soon enough to offset any weakness in the tank-car segment. Competition is likely to get fiercer in the years to come as well.

Tower Group International declined 6% after receiving notice of potentially getting delisted from the Nasdaq exchange. The company said earlier this month that it would have to restate its financial statements for its 2011 and 2012 years, and the Nasdaq letter that Tower received pointed to the fact that the company hasn't filed a quarterly report for the September quarter as the basis for its determination. The Nasdaq already gave the company until November 29 to file its June-quarter report, so it's likely that Tower Group will get another extension for the September quarter as well. Nevertheless, shares have plunged more than 80% since late July, and it's uncertain whether the insurance company will be able to get back on its feet anytime soon.

Look forward to 2014 for great returns
The market stormed out to huge gains across 2013, but opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

Read/Post Comments (0) | Recommend This Article (1)

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.

Compare Brokers

Fool Disclosure

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: 2738753, ~/Articles/ArticleHandler.aspx, 9/24/2016 10:24:45 PM

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...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,261.45 -131.01 -0.71%
S&P 500 2,164.69 -12.49 -0.57%
NASD 5,305.75 -33.78 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/23/2016 4:00 PM
ARII $38.97 Down -0.90 -2.26%
American Railcar I… CAPS Rating: ****
GME $28.19 Down -0.08 -0.28%
GameStop CAPS Rating: **
TWGP.DL $0.00 Down +0.00 +0.00%
Tower Group CAPS Rating: ***