AT&T, Verizon, and Herbalife Fall, as RadioShack's Super Bowl Ad Pushes Stock Up

Major indexes tank after poor economic data.

Feb 3, 2014 at 1:00PM

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 another round of poor economic data hit investors today, the major indexes are heading lower once again. As of 1:05 p.m. EST, the Dow Jones Industrial Average (DJINDICES:^DJI) is down 238 points, or 1.5%, the S&P 500 is off by 1.7% and the Nasdaq is down 2.1%.

The Institute for Supply Management reported a January manufacturing reading of 51.3 when analysts were looking for a 56.4. Anything below 50 indicates contraction, so while the numbers weren't that bad, they aren't great either.  

One Dow loser today is AT&T (NYSE:T), as shares have now fallen more than 3.5%. The drop comes after the company went on the offensive in the wireless service providers wars. AT&T announced a new family plan that includes unlimited talk, text, and 10 gigabytes of data for two lines at $130 per month, and only $15 per additional line. A family of five can now have a plan for about $175 month; Verizon's (NYSE:VZ) similar plan would cost roughly $300. Shares of both carriers are down about 3%, as they will likely begin to see margins fall as this battle continues.

Shares of the controversial supplements company Herbalife (NYSE:HLF) are down more than 2%. The move comes after the company released some preliminary earnings information and a few other housekeeping notes. The earnings forecast came in much better than analysts expected -- management now feels it will post revenue of $1.27 billion in the fourth quarter, above the $1.22 Wall Street predicted, and about $4.82 billion for the fiscal 2013 year, slightly lower than the $4.87 billion consensus estimate. Earnings per share are expected to come in within a range of $5.35-$5.39, much higher than the $5.26 analysts estimated. Additionally, the company announced it would increase its share repurchase program by $1 billion, which adds to its current program tol give it roughly $1.5 billion to buy back stock. But the news that the company is taking out $1 billion in senior convertible notes to help pay for this buyback, and for other administrative and corporate purposes, may be what's sending shares lower.  

One big winner from last night's Super Bowl, besides Seattle, is RadioShack (NYSE:RSHCQ), as shares are up 4.4% this afternoon on very little news other than the retailer's Super Bowl commercial last night. RadioShack poked a little fun at itself with an ad that had an employee answer the telephone and then say, "The 80s called. They want their store back." Seconds later, the store was being torn apart by movie and TV characters from the 80s. The company was trying to show that its stores have been updated and that the "new" RadioShack stores are very nice and inviting. Whether the ad is enough to change consumers opinions and get them back in the store will be seen, but it was certainly a good attempt at doing just that.  

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Matt Thalman has no position in any stocks mentioned. The Motley Fool has the following options: long January 2015 $50 calls on Herbalife Ltd.. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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