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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers