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Dow Recovers, WWE Advances, and Tile Shop's Sell-Off Worsens

By John Divine - Jul 11, 2014 at 6:34PM

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Home Depot stock ends in the black after being the Dow's worst performer yesterday.

Stocks headed into the weekend on a peaceful note today, ending in mostly positive territory. A struggling Portuguese bank, believe it or not, spooked investors yesterday, as a flight to safer investments knocked a good 70 points off the Dow Jones Industrial Average ( ^DJI 1.87% ). With little breaking economic news to go on, and all eyes to a flurry of quarterly reports next week, the Dow added 28 points, or 0.2%, to end at 16,943 today.

Home Depot ( HD 1.93% ) was the hardest-hit stock in the blue chip index yesterday. Today's modest 0.3% gain shows that investors forgave some of yesterday's losses -- losses that were hardly rational to begin with. Yesterday, Wall Street nearly had a conniption when flooring retailer Lumber Liquidators sharply cut its second-quarter earnings outlook. The lousy quarter at the $1.5 billion Lumber Liquidators in turn erased more than $1.5 billion from Home Depot's market value alone, as shareholders worried the flooring retailer's struggles were indicative of the home-improvement industry, as a whole.

Tile Shop Holdings ( TTSH -0.14% ) was also a victim of yesterday's collective home-improvement industry freakout. Shares continued falling today, shedding an additional 6.9% on Friday. While Lumber Liquidators' poor performance is more relevant and worrisome for Tile Shop Holdings -- which is also a small-cap flooring retailer -- the sell-off in this stock also seems a little on the harsh side. Motley Fool real-money manager Jim Royal noted yesterday that he was excited to snap up shares at discount prices on the decline.

Can John Cena's popularity bring more eyeballs to the WWE Network? Image Source: WWE.

Shares of World Wrestling Entertainment ( WWE -0.16% ) are steeply discounted from where they began the year, off nearly 30% from their New Year's levels. All of those losses and then some, however, were accrued on a single day in May, when the stock took a 43% smackdown. World Wrestling Entertainment shareholders were livid about the broadcasting deal struck with Comcast's NBCUniversal, which will be worth around $200 million annually -- a few hundred million less than what investors expected. But the company isn't completely down-and-out: Shares advanced 2.3% Friday, and the catalyst most WWE believers are hoping for is the company's live-streaming subscription service, which needs 1.4 million users to break even. The WWE Network aims to have 1 million subscribers by the end of the year.

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.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$35,227.03 (1.87%) $646.95
The Home Depot, Inc. Stock Quote
The Home Depot, Inc.
HD
$415.70 (1.93%) $7.89
Tile Shop Holdings, Inc. Stock Quote
Tile Shop Holdings, Inc.
TTSH
$7.29 (-0.14%) $0.01
World Wrestling Entertainment, Inc. Stock Quote
World Wrestling Entertainment, Inc.
WWE
$49.34 (-0.16%) $0.08

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

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