Image source: Getty Images.

Stocks posted significant declines on Thursday, with both the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX: ^GSPC) indexes falling by a full percentage point.

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Data source: Yahoo! Finance.

The banking sector led the broader market lower, and that weakness produced a 1.4% decline in the Financial Select Sector SPDR ETF (NYSEMKT:XLF). Meanwhile, crude oil prices continued to rally following yesterday's news that OPEC nations will be lowering production. The United States Oil Fund LP (NYSEMKT:USO) gained 2% to bring its five-day return to 9%.

As for individual stocks, Fitbit (NYSE:FIT) and Pier 1 (OTC:PIRRQ) each made notable moves on Thursday.

Fitbit's device downgrade

Fitbit shares fell 11% after a Wall Street analyst downgraded the stock to the equivalent of a sell rating, saying shares have plenty of room to add to their year-to-date 50% loss. Pacific Crest's Brad Erikson said in a note to clients that his firm contacted 15 major retailers about the company's flagship fitness device, the Charge 2, and found evidence of weak initial demand. While the sales pace won't spike until closer to the Christmas shopping peak, the Charge 2 appears to be trailing both the Blaze and Alta at this point in their life cycle. In addition, Erickson thinks the launch weakness could be compounded by a general drop in active user growth.

Image source: Getty Images.

There isn't much substance to this downgrade, in my view, given that it plays off of a small data point in what will be a large, complex global product launch. Investors will be better off waiting for complete sales data before rushing to sell their shares.

However, the stock's sharp move highlights an important risk for Fitbit owners: That its business is highly dependent on a string of successful product launches. The company thinks that good early media reviews for Charge 2 suggest it will be a big hit this holiday season. Yet even scant evidence that points the other way will likely push the stock lower in the short term -- at least until hard sales data is available.

Pier 1's cautious optimism

Pier 1 Imports shares rose despite lackluster quarterly results from the specialty retailer. As the company warned in a prior update, sales at existing locations fell 4.3% and net loss amounted to $0.05 per share compared to the prior year's $0.04 per share profit. Executives blamed weak customer traffic trends for the shortfall. "Our top-line results reflect soft store traffic levels throughout the second quarter, most notably in July," CEO Alex Smith said in a press release.

There were a few bright spots in the report, though. Gross profit margin improved, as did e-commerce revenue as a percentage of the total business. Pier 1 is also encouraged by the results from its return to television advertising, which it believes contributed to improved sales and profit trends in August and September.

Still, the company is bracing for a potentially difficult holiday season ahead. Smith and his management team project declining sales of about 2% in each of the next two quarters. Wall Street was apparently expecting a more somber reading of the market, and so shares rebounded slightly on Thursday and recovered some of the almost 40% loss they've endured over the last 12 months.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.