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Speculative Stocks Fall Again While Financials Get All Shook Up

The jobs report for March was released this morning, and while it wasn't what economists expected, it wasn't terrible, either. The jobs number came in at 192,000, below the 206,000 Wall Street was looking for, and the additional 500,000 added to the workforce during the month held the unemployment rate at 6.7%. Despite these figures not being terrible, the major U.S. indexes had a terrible day. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) lost 159 points, or 0.96%, the S&P 500 fell 1.25%, and the Nasdaq slid lower by 2.6%.

Again, today, we saw some of the highfliers getting hammered. Shares of Facebook lost 4.61%, Netflix fell 4.89%, Priceline was down 4.8%, Keurig Green Mountain was down 5.06%, and Twitter was off by 2.07%. The more stable companies, on the other hand, were higher as investors rushed out of the speculative and moved into the more conservative names. Coca-Cola (NYSE: KO  ) was up 0.39%, Johnson & Johnson was higher by 0.16%, and McDonald's rose 0.22%. Coke's move higher came even as the criticism for the company's management team and its compensation heated up again yesterday. Activist investor David Winters told CNBC's "Closing Bell" that the company's buyback plan has been hijacked, and management is being overly compensated for the job it has done. With shares of Coke down 6% during the past 52 weeks, investors certainly have a reason to be upset when management is making millions, and the stock is heading lower. It's unlikely this fight will end here. 

Shares of Visa (NYSE: V  ) dropped 3.4% today after Wal-Mart announced it would be using MasterCard for its branded credit card. Wal-Mart is switching from Discover, and while Visa will not be losing revenue by not being chosen, this deal with Wal-Mart would have been a huge win for the company. But, considering that Wal-Mart sued Visa earlier in the week for $5 billion in damages related to swipe fees, it's not hard to see why Wal-Mart chose to go with MasterCard. 

Shares of Charles Schwab (NYSE: SCHW  ) and E*Trade Financial (NASDAQ: ETFC  ) both ended today lower, off 4.79% and 7.83%, respectively. The moves come following the release of Michael Lewis's book Flash Boys, which discusses high-frequency trading. The concern is that the book has shed light on a key revenue stream for these companies, which regulators may reduce. What happens is trading firms, or "market makers," need "order flow," or trading orders from retail customers, which Charles Schwab and E*Trade happily provide in exchange for payment. What regulators are looking into is whether there lies a conflict between customers getting the best trade and the companies getting the biggest fee. 

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Matt Thalman

Matt primarily covers the Dow Components, the Major Indexes daily moves, Consumer Goods stocks, and General Investing Topics.

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Related Tickers

9/1/2015 4:35 PM
^DJI $16058.35 Down -469.68 -2.84%
ETFC $25.00 Down -1.29 -4.91%
E*TRADE Financial… CAPS Rating: ***
KO $38.75 Down -0.57 -1.45%
Coca-Cola CAPS Rating: ****
SCHW $29.09 Down -1.29 -4.25%
Charles Schwab CAPS Rating: ****
V $68.96 Down -2.34 -3.28%
Visa CAPS Rating: ****