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.
After the upbeat economic data that we've seen recently, investors weren't prepared for today's relatively small gain in nonfarm payroll numbers in the December employment report. Bond yields plunged as investors suddenly started putting further Fed accommodation back on the table, and stocks generally gained ground, even though the Dow lost about eight points on the day. Still, Sears Holdings (SHLDQ), MannKind (MNKD 0.72%), and Synnex (SNX 1.12%) were among the worst performers on the day, each falling double-digit percentages due to company-specific news.
Sears plunged 14% after the retailer reported downbeat numbers for its holiday quarter last night. The retailer said that domestic Sears stores saw comps fall 9.2%, with Kmart comps falling 5.7%, and overall companywide same-store sales falling 7.4%. Adding insult to injury, Moody's downgraded Sears' bond rating to Caa1, which could make it more difficult for Sears to get the future financing it may need at favorable terms. The dour results led many to conclude that Sears will have trouble recovering from its current malaise, although it's far from the first death sentence the retailer has received from overanxious analysts.
MannKind declined 16% after the company announced a tentative date for the coming review from the FDA advisory committee of its Afrezza inhaled medication for hyperglycemia. Given that today's news only sets a timeline rather than gives any actual results, today's drop makes little more sense than yesterday's advance. Investors have waited a long time for results; therefore, the FDA advisory review on April 1 will mark a welcome step of progress one way or the other for MannKind.
Synnex fell 11%. The company delivered solid results for its fiscal fourth quarter, but its current-quarter earnings guidance fell 8% to 12% short of what investors were projecting for the business-process outsourcing and services company. The big question facing Synnex is whether the acquisition of IBM's (IBM 1.05%) customer-care service unit will help it boost its long-term prospects enough to make today's drop look like a bargain opportunity. With Synnex looking for continued improvement in demand for information-technology services in the future, the answer to that question could well be yes.
