Image source: Fossil Group.
The Dow Jones Industrials jumped up to another record close on Friday, but the S&P 500 broke its four-day record streak with a slight loss on the day. Not even a terrorist attack in southern France was enough to dispel all the optimism in the U.S. stock market, and investors instead seemed to rely on fundamental strength in the U.S. economy to justify keeping stock prices near their high-water marks.
Yet some individual stocks did post big declines, and Fossil Group (FOSL -3.42%), Infosys (INFY -0.70%), and Ziopharm Oncology (TCRT -1.67%) were among the worst performers on the day.
Fossil takes a hit from Swatch
Fossil Group lost almost 7% as investors responded in sympathy with bad news from a fellow watchmaker. Shares of Switzerland's Swatch Group plunged after the company warned that its first-half profit had fallen by 50% to 60%, and the company reduced its revenue guidance for the full year. Some speculated that luxury watches in the same price segment as popular smartwatches took the biggest hits, but others noted that the cost-cutting abilities of Swatch and its peers are limited by the need for high-quality craftsmanship in the upper levels of the luxury retail market. Given that Fossil seeks to stake its claim in the luxury space as well, news that retail has weakened in Hong Kong, France, and Switzerland is bad news for its shareholders as well.
Infosys gives a Brexit warning
Infosys fell 9% after the information technology services company said it won't be able to hit its previous guidance for sales for the current fiscal year. First-quarter earnings were below expectations, and more importantly, Infosys fears that the U.K. decision to leave the European Union has dramatically increased uncertainty surrounding its growth prospects. The company cut 1 to 2.5 percentage points from its growth estimates on the top line, now expecting revenue growth of 10.5% to 12%. In particular, because of Infosys' focus on financial companies, the fate of London's financial sector will have a huge impact on Infosys. The company simply can't predict with any certainty what the net result will be, and thus shareholders ramped down their expectations for the global IT giant.
Ziopharm deals with tragedy in a trial
Finally, Ziopharm Oncology dropped 12%. The cancer-fighting drug company said that a cancer patient who had enrolled in a phase 1 study of its Ad-RTS-hIL-12+ orally administered veledimex, a treatment for those with recurrent or progressive glioblastoma or grade III malignant glioma, had died. Ziopharm noted that two patient deaths had occurred previously but were found to be unrelated to the study drug, and the third death had just been reported to Ziopharm. The company will collect and analyze data in order to make reports to the U.S. Food and Drug Administration, and Ziopharm is working on the appropriate response for the study going forward. The drugmaker did say that for those patients who are in follow-up for the phase 1 study, it believes that "preliminary overall survival remains encouraging." Nevertheless, investors are worried that the study might not go forward, which would represent a big setback for the biotech's future.
