Wall Street started the new week on a down note, reacting negatively to strong economic data that raised concerns that the Federal Reserve might not slow down the pace of its monetary tightening efforts as quickly as previously hoped. The Nasdaq Composite (^IXIC +1.52%) fell nearly 2%, while the Dow Jones Industrial Average (^DJI +1.79%), and S&P 500 (^GSPC +1.20%) posted smaller but still significant losses.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
(1.40%) |
(483) |
|
S&P 500 |
(1.79%) |
(73) |
|
Nasdaq |
(1.93%) |
(222) |
Data source: Yahoo! Finance.
A couple of stocks made relatively sizable moves on Monday. Universal Display (OLED +0.22%) got a nice boost on a strategic initiative that could pay off with long-term growth for the organic LED specialist, but VF Corp. (VFC +4.15%) posted disappointing results and will have to deal with a challenging situation inside the company. Read on for more details from both companies.
Universal Display makes a deal
Shares of Universal Display rose nearly 6% on Monday. The maker of energy-efficient computer and television displays and lighting products announced that it had entered into a long-term deal with a key peer in the electronics space.
Universal Display and Samsung Display signed long-term agreements relating to supplying materials and licensing technology. Under the terms of the deal, Universal Display will supply phosphorescent organic LED materials and technology to Samsung Display, so that Samsung can manufacture organic LED displays with them. The five-year agreement runs through the end of 2027, and it includes provisions that allow for a further extension of two years at the end of the term.
NASDAQ: OLED
Key Data Points
Universal Display CEO Steven Abramson was pleased with the agreement, noting that his company and Samsung Display have already been partners in the consumer electronics industry for more than 20 years. With the new agreement, Universal Display expects to keep developing the most advanced and desirable organic LED displays, and the collaboration should also give valuable exposure to its proprietary UniversalPHOLED material line.
Even after the rise, though, Universal Display stock price is still roughly a third below its best levels of the past year. Combine that with a dividend yield above 1%, and some investors are finding the company's shares to be an attractive proposition.
VF faces a leadership transition
Meanwhile, VF Corp. shares finished the day down 11%. The company behind several apparel and footwear brands, including Vans, Timberland, and The North Face, reported that it had named a new chief executive officer and issued updated guidance for its 2023 fiscal year.
CEO Steve Rendle made the decision to retire from his positions as VF CEO and board chair. Lead Independent Director Benno Dorer will act as interim CEO effective immediately, while fellow board member Richard Carucci will serve as interim chair.
NYSE: VFC
Key Data Points
Rendle had a 25-year history with VF, including working for nearly six years in his leadership role atop the company. His retirement came as a surprise to some, but poor recent performance for the apparel stock hasn't made investors too happy with his leadership.
At the same time, VF cut its revenue-growth forecast for the second half of its fiscal year to just 3% to 4%, down two percentage points from its previous guidance. In addition, VF reduced its earnings guidance by $0.30 to $0.40 per share, now predicting between $2 and $2.20 per share in full-year profit. Investors will want to keep a close eye on VF to see if its brands perform well during the key holiday season, as any further deterioration could eventually threaten longer-term business-metric targets and hurt investor confidence even more.
