Dow Slumps, 1 Company Drags an Entire Industry Lower Today

Home Depot, Tile Shop Holdings, and Lumber Liquidators all bite the dust on Thursday.

Jul 10, 2014 at 6:17PM

Down at one point by 180 points, the Dow Jones Industrial Average (DJINDICES:^DJI) rallied from its morning lows, but the comeback still wasn't enough to put the index in the black on Thursday. Fears that the woes of a troubled Portuguese lender could ripple throughout the continent sent European stocks spiraling lower today, causing Wall Street to take notice. The Dow finished with losses of 70 points, or 0.4%, ending at 16,915.

Home Depot (NYSE:HD) drove the Dow's losses on Thursday, shedding 1.7%, and finishing as the most severe blue-chip decliner of the day. The home-improvement retailer fell after concerns arose about the strength of the housing market's recovery. Deutsche Bank cut second-quarter earnings-per-share, or EPS, estimates slightly, from $1.45 per share to $1.44 per share. Home Depot has proven to be a conservative, yet profitable, way to play the rebound in the real estate market; the stock has soared more than 250% in five years as home prices recovered from crisis-level lows.


Lumber Liquidators investors weren't as happy as this young chap today. Image Source: Lumber Liquidators

Interestingly enough, Home Depot's losses today were more a result of Lumber Liquidators' (NYSE:LL) incorrigibly awful second quarter than anything else. Lumber Liquidators -- a hardwood-flooring retailer -- issued worrisome warnings to shareholders today, telling them, in essence, that its second-quarter results would be abysmal. Traffic fell off, same-store sales slumped 7.1%, and management guided for EPS around $0.60 in the quarter against expectations for $0.90. Shares cratered, plunging 21.5% on the news, and dragging respectable retailers in its industry, like Home Depot, lower as a result.

Shares of Tile Shop Holdings (NASDAQ:TTS), for instance, were also dragged down by Lumber Liquidators' ugly performance today as the tile retailer caught heat from Wall Street. Credit Suisse went so far as to punish Tile Shop's earnings forecasts, reasoning that if the flooring market was soft across the board last quarter, then Tile Shop is also in for some disappointing results. Tile Shop stock slumped 9.3% as investors feared a same-store sales decline in the first quarter will be followed by another lousy showing in the second quarter.

Warren Buffett: This new technology is a "real threat"
While the housing market has been an area of exceptional growth in recent years, that trend seems to be slowing down. At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth more than $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping into one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool recommends Home Depot, Lumber Liquidators, and Tile Shop Holdings. The Motley Fool owns shares of Lumber Liquidators and Tile Shop Holdings. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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