Dow Plunges Into the Red Amid Nike's Earnings Fallout

After a great start to the day, stocks have fallen hard in afternoon trading, with the the Dow Jones Industrial Average (DJINDICES: ^DJI  ) down 10 points as of 2:30 p.m. EDT after rising triple digits in the morning. Nike's (NYSE: NKE  ) not helping the matter, as investors have crushed the athletics giant's stock today in the wake of its earnings report yesterday. Meanwhile, Symantec  (NASDAQ: SYMC  ) has been blasted after a shocker that shook up Wall Street today. Let's catch up on what you need to know.

Nike's future fears
Nike's shares have plunged by 4.1% today, far and away the worst performer of the Dow so far. The company's most recent quarter actually pulled off a respectable performance for investors: revenue jumped 12% to $6.97 billion, topping analyst expectations and pushing earnings to $0.76 per share, a mark that also managed to beat Wall Street's projections. However, today's big drop isn't about what's in Nike's past, but what the company sees in its future.

Investors bailed on the stock after the company projected sales growth only in the mid-single digits for this quarter, far below the 12% growth analysts expect out of the company. Blame the stronger dollar for currency woes that Nike expects to cut into international sales, a particular problem as the company makes up 45% of its total revenue from outside of the United States. The dollar's pushed against the euro lately, and with Nike's Western European sales picking up steam in recent quarters, its results could take a hit across the Atlantic.

Most concerning for investors comes from the other side of the Pacific, however. Nike cautioned that sales in China could fall flat or even decline for the quarter, raising new fears that it is missing out on growth in the world's most promising emerging market. Chinese sales did jump by 7% in the last quarter, but with athletics goods in high demand there, along with the ongoing climb in the country's middle class and urban populations, Nike's in no position to sacrifice footing in this lucrative market. Competition has hurt Nike in China in recent years, and investors have to keep a close eye on whether the company can continue to push forward overseas in coming quarters.

Perhaps today's biggest market shake-up comes from outside of the Dow, however. Symantec stock is off by a massive 12.7% after the software and computer security specialist unexpectedly sent CEO Steve Bennett packing. While Wall Street's been high on Bennett in the recent past, Symantec judged its leader to be too slow in pushing for innovative changes in a company, according to sources cited by The New York Times and The Wall Street Journal.

Symantec hasn't yet taken hold of the mobile computing niche for its security software and is dealing with sluggish growth and rising competition. Nonetheless, analysts had seen the company headed toward better days under Bennett, and the shocking firing leaves Symantec headed toward an uncertain future. Keep a close eye on how the company's search for a new CEO goes, as it will speak to what Symantec's looking for in its future.

One great opportunity that could blow away the Dow's gains in 2014
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.

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.

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: 2885396, ~/Articles/ArticleHandler.aspx, 9/4/2015 4:02:08 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...

Dan Carroll

Dan began writing for the Motley Fool in 2012. He is a health care specialist who also follows the defense industry along with tracking the broader U.S. and international markets.

Today's Market

updated 6 hours ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

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

9/3/2015 4:35 PM
^DJI $16374.76 Up +23.38 +0.14%
NKE $110.85 Up +0.15 +0.14%
Nike CAPS Rating: *****
SYMC $19.95 Up +0.01 +0.05%
Symantec CAPS Rating: ***