Please ensure Javascript is enabled for purposes of website accessibility

Stock Markets Hit New Records; Retail Stocks, Teva Take Hits

By Dan Caplinger – Aug 18, 2020 at 5:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P 500 joined the Nasdaq at all-time highs.

It's been a long time coming, but the S&P 500 (^GSPC -2.64%) finally managed to hit a new record high, joining the Nasdaq Composite. That officially brought the coronavirus bear market to an end in many investors' eyes, even though the Dow Jones Industrial Average (^DJI -2.12%) is still a bit below its past peak. Indeed, the Dow actually gave up ground, as did small-cap indexes. That showed the continuing tension within the stock market between winners and losers from COVID-19 and other key factors.

Today's stock market


Percentage Change

Point Change




S&P 500



Nasdaq Composite



Data source: Yahoo! Finance.

Retail stocks took a sizable hit on Tuesday, failing to keep up with the broader market. Moreover, drugmaker Teva Pharmaceutical Industries (TEVA -2.51%) took a tumble as investors questioned whether the company will end up being liable for allegations of wrongdoing.

More bad news for retail

The coronavirus pandemic has hit retail stocks hard, and it's not as though the industry was all that strong before the virus came. Even the better performers face new challenges, and weaker players could have a lot of trouble surviving in the long run.

Seven people carrying shopping bags of various colors.

These folks just aren't going shopping anymore. Image source: Getty Images.

The weakest link in retail today was Kohl's (KSS -5.10%), which dropped almost 15% after releasing second-quarter financial results. Store closures sent revenue plunging 23% from year-ago levels, and the company reversed a year-earlier profit with a loss. The only silver lining was that the declines weren't as sharp as many had feared. Yet with cost-cutting measures that included holding off on inventory replenishments, it could be a while before Kohl's gets back up to speed.

Even at the top of the retail food chain, stocks performed poorly. Many saw results from Walmart (WMT -0.82%) and Home Depot (HD -2.46%) as positive from a fundamental standpoint, but both saw their share prices lose ground.

Retail's digital transformation has accelerated dramatically, and success is measured by how quickly companies can adapt. Those that can't are likely to follow their peers that have already sought bankruptcy protection for more dramatic reorganizations.

A new controversy for Teva

Elsewhere, Teva Pharmaceutical Industries saw its stock drop 10%. The drug company is the subject of litigation that could prove problematic.

The U.S. Department of Justice filed a lawsuit against Teva in federal court on Tuesday. The allegations include claims that Teva made payments of hundreds of millions of dollars to charitable foundations in an attempt to circumvent legislative efforts to keep drug prices under control. Teva had dramatically increased the price of its key Copaxone treatment for multiple sclerosis, and the Justice Department seems to be characterizing the payments as illegal kickbacks.

Teva is already a high-profile participant in litigation regarding the opioid crisis, and is facing a lawsuit for its handling of generic drug prices as well. Meanwhile, other drugmakers are getting scrutiny for their relationships with charitable entities designed to help patients afford their medications.

Teva's stock has performed terribly in recent years. The latest blow won't restore any confidence that the drugmaker can bounce back anytime soon.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Home Depot and recommends the following options: long January 2021 $120 calls on Home Depot and short January 2021 $210 calls on Home Depot. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kohl's Corporation Stock Quote
Kohl's Corporation
$25.14 (-5.10%) $-1.35
Teva Pharmaceutical Industries Limited Stock Quote
Teva Pharmaceutical Industries Limited
$7.76 (-2.51%) $0.20
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$29,055.77 (-2.12%) $-627.97
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,620.77 (-2.64%) $-98.27
The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
$275.26 (-2.46%) $-6.93
Walmart Stock Quote
$132.02 (-0.82%) $-1.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.