Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Wall Street, with renewed assurance that the central bank will move to taper bond buying at the next policy meeting in September, slumped on Wednesday after minutes from the Federal Reserve's July convention were made available to the public. Most committee members were supportive of tapering efforts, the transcript revealed, a conviction that sent the S&P 500 Index (SNPINDEX:^GSPC) sliding 9 points, or 0.6%, ending at 1,642. That said, a mere 0.6% drop would have been welcomed by shareholders in the S&P's three worst performers today.
Office supplies retailer Staples (NASDAQ:SPLS) cratered 15.3%, the sort of drop one rarely sees in the established names in the S&P 500. It was, in fact, the stock's largest single-day decline in two years, and one of the worst declines in Staples' nearly quarter-century as a publicly traded company. The severe sell-off was sparked by the company's bleak third-quarter earnings and subsequently anemic yearly forecast. EPS estimates for the year fell from a range of $1.30 to $1.35 per share to just $1.21 to $1.25 per share, as sales unexpectedly dropped 2% in the third quarter.
PetSmart (NASDAQ:PETM), after reaching fresh five-year-highs just days ago, shed 5.3% on the heels of a quarterly earnings beat. While the company trumped profit estimates, investors buy the future of a company, not the past. Unfortunately, PetSmart's full-year guidance barely met the low end of analyst projections, and with the stock having recently reached such heady valuations, there wasn't much room for disappointment.
Lastly, J.C. Penney (NYSE:JCP) shares logged yet another day as one of the index's worst performers, losing 4.9%. As if it weren't already clear, hedge fund manager Bill Ackman labeled his investment in the company a failure in a letter to fund investors, although he didn't directly address how or when Pershing Square plans to exit its large position in the floundering department store. Ackman recently stepped down from the company's board of directors, and has been vocal about replacing the replacement CEO that he chose for J.C. Penney after just months on the job.
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