Amazon Lifts Prime Charge and Aeropostale Tumbles After Hours

After what had been a relatively quiet week thus far, stocks fell off a cliff today as worries about Ukraine and China sent markets into a tailspin. The Dow Jones Industrial Average  (DJINDICES: ^DJI  ) finished down 231 points, or 1.4%, while the S&P 500 lost 1.2%. Reports that Russia had begun military exercises near its border with Ukraine, as it's refused to back down from its threat to annex Crimea, helped prompt the sell-off. German Chancellor Angela Merkel also warned that a "catastrophe" could follow if Russia did not back down. The VIX, Wall Street's so-called fear factor, responded by jumping 12%.

Across the Pacific, meanwhile, new reports confirmed worries about a slowing economy in China, as growth in industrial output slowed to 8.6%, its weakest mark since 2009, and several other indicators in a range of industries from retail to housing also showed growth grinding to a halt. It was enough to prompt suspicion that China could miss its GDP growth target this year of 7.5%.

The international news overshadowed solid economic data at home, as February retail sales were slightly better than expected, increasing 0.3%, and initial unemployment claims last week fell to 315,000, beating projections of 329,000, and indicating that the labor market continues to improve.

Amazon.com  (NASDAQ: AMZN  ) made waves today, announcing that it would raise prices on its Prime membership program to $99 from $79, the first time it's ever done so on its flagship membership service. With a subscription to Prime, customers get free two-day shipping on all items, and free streaming from Amazon's video library. The company has always been quiet about the number of Prime subscribers, but analysts estimate that it could be as high as 25 million, though many do not pay full price. If the move is successful, it could generate $200 million or more in additional sales, nearly all of which would go straight to the bottom line. Considering, the online giant made a profit of just $274 million last year, the price increase could give a serious boost to the bottom line. Shares were up as much as 3.4% this morning, but finished up just 0.2% on the broad market weakness.

After hours, Aeropostale  (NYSE: ARO  ) became the latest teen-apparel retailer to face the music as shares tumbled 13% following the release of the company's fourth-quarter earnings report. The mall staple experienced its fifth straight quarterly loss, falling to -$0.90 per share, much worse than estimates at -$0.35. Same-store sales, meanwhile, sank 15%, as overall sales fell 16%, to $670 million, missing estimates at $683.8 million. Separately, Aeropostale reported a new financing deal with the private equity firm Sycamore Partners, which will provide a $150 million loan to the company in exchange for the right to acquire as much as a 5% stake in the company at a share price of $7.25, though that did little to instill investor confidence. Things seem to just be going from bad to worse for the retailer, as first-quarter EPS guidance of ($0.75)-($0.70) was much lower than estimates at -$0.31.

The cure for a down day
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks, as a group, handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks, in particular ,are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.


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

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: 2875546, ~/Articles/ArticleHandler.aspx, 11/21/2014 7:07:45 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