Dow Plunges Into the Red Amid Nike's Earnings Fallout

Symantec makes the big splash of the day with its unexpected firing of CEO Steve Bennett.

Mar 21, 2014 at 2:30PM
Daily Fool

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.

Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers