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Why Stock Dropped 11% Today

By Rich Smith - Feb 24, 2020 at 7:58PM

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Don't worry. Be happy.

What happened

Yowza -- coronavirus sure did a number on the stock markets today. By the close of trading Monday, the Dow was down 3.6%, the Nasdaq 3.7%, and the broader S&P 500 3.4%.

Stocks with no bad news to report -- (STMP), for example -- got hit as hard as any others, and harder than most. In fact, enduring a 10.8% drop in share price, Stamps' loss was nearly three times as bad as the Nasdaq's at large.

Stock chart goes up and then comes back down

Image source: Getty Images.

So what

And that's OK.

There was, after all, no bad news released Monday that was particular to -- "just" bad news for stocks in general, and for the global economy in general.

After the sell-off, this parcel shipping company is still sitting pretty atop a Q4 earnings report that was much better than expected. It still has its partnership with UPS intact. It is also "continuing to promote the [post office's] services under ... partnerships with the [latter's] resellers." And all of this business is going well enough that still expects to earn between $4 and $5 per share this year -- well above the $3.23 per share Wall Street had been expecting.  

Now what

None of the above has changed. What has changed is that after surging 65.5% on Thursday, and 10.4% more Friday, today gave back Friday's gains, and a bit of Thursday's.

That still leaves stock worth an astounding 63% more that it cost before earnings came out three days ago. And that's still something its shareholders can be happy about.

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