SodaStream and Lululemon Tumble Along With Dow

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 an uneventful morning, stocks took a spill today this afternoon on comments from the Federal Reserve, as all three major indices dropped more than 1%. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) was the best performer of the three but still fell 179 points, or 1.1% Comments from Atlanta Fed President Dennis Lockhart seemed to spark the sell-off, as he lent cautious support to a continued taper of the Fed's now $75 billion monthly bond-buying program. The stimulus program, often called quantitative easing, or QE, has been a major focus of the market over the past year, as the bond buying has helped stimulate the economy and keep interest rates low, encouraging investing in stocks over bonds. Lockhart told a group at the Atlanta Rotary Club, "If all goes as expected, there is a policy transition under way from a QE world, so to speak, to a post-QE world." The remarks seemed to rattle investors, in a possible delayed reaction to Friday's disappointing employment report. Despite a surprisingly low number of jobs added at 74,000, stocks held steady as investors perhaps interpreted the news as a delay in a continued taper by the Fed.

Elsewhere, several retail stocks tumbled as a number of companies reported preliminary sales figures on the eve of the ICR XChange conference, where several retailers will be presenting.

Falling the most of the group was SodaStream International (NASDAQ: SODA  ) , which drastically rolled back its profit guidance for the year, seeing shares fall 26% as a result. The maker of the at-home soda machine said it now sees an adjusted net income of $52.5 million for the year, down from previous guidance of $65 million. CEO Daniel Birnbaum said the company suffered from higher product costs, lower sell-in prices, and a weak product mix. The drop in profit expectations was extreme, but sales still grew 29%. Management said it was working to restore margins to their previous levels, and with a P/E of just 16 now, the stock could easily bounce back if leadership can bring back bottom-line growth.

Fellow former highflier lululemon athletica (NASDAQ: LULU  ) was also biting the dust, as it also redirected its fourth-quarter outlook, sending shares falling 16%. The yoga-wear seller said it now sees same-store sales falling by the low to mid-single digits, down from a previous forecast of flat. It also revised its EPS projection to a range of $0.71-$0.73, down from a range of $0.78-$0.80, as management said January traffic and sales were well off expectations even though holiday-season sales were solid. Today's news is just the latest setback for the company, after a 2013 riddled with disappointments including a product recall and the surprise resignation of its CEO. Shares are now down about 40% since last summer.

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