Stocks today experienced a late-afternoon drop and ended near their lowest point of the session. The Dow Jones Industrial Average (DJINDICES: ^DJI) fell 117 points, or 0.65%, and the S&P 500 (SNPINDEX: ^GSPC) lost 15 points, or 0.73%.
With one trading day left in 2015, indexes could just as easily end in positive territory as in negative territory. The S&P is less than 1% higher on the year, while the Dow is down by slightly over 1%.
Weight Watchers and Oprah
With their 19% spike, shares of Weight Watchers got a step closer to a stunning rebound. The stock is now close to positive territory for the year after having plummeted by 80% through the first six months of 2015.
Today's bounce can be tied to the same force that has helped shares recover since mid-October: star power. Weight Watchers just introduced its first advertisement featuring Oprah Winfrey, who on Oct. 15 revealed that she had taken on a 10% stake in the company.
At the time, CEO Jim Chambers said that Oprah had a "remarkable ability to connect and inspire people," and that her role in the business would include sharing her experiences and perspective as a member of the Weight Watchers program.
Oprah today began to deliver on that promise -- in a big way. She sent the ad out to her 30 million Twitter followers along with an invitation to sign up:
In its last quarterly report, Weight Watchers posted 15% lower sales as its subscriber rolls fell to 36 million from 42 million in the prior-year period. And Wall Street is expecting an even worse 21% sales dip for the fourth quarter. But the stock gain suggests investors see the company returning to subscriber growth in early 2016 -- with a key assist from Oprah.
3D Systems' shrinking path to growth
3D Systems dropped 4% today as investors continued to digest the news, announced yesterday, that it was exiting the consumer 3D printing business. Its entry-level Cube printer, along with the accompanying platform of products ranging from phone cases to toys to jewelry, will be discontinued by the end of January, 2016.
Management made this move so that the company could focus on "near-term opportunities and profitability," according to a press release. In fact, the switch will have an immediate, positive effect on earnings.
While revenue will fall by just 2% as a result of exiting the consumer business, overall profitability will tick higher as focus turns to commercial users. "We believe that the most meaningful opportunities today are in professional and industrial settings," interim CEO Andy Johnson said.
Sure, focusing on professional customers should yield higher profits, but it also highlights the defensive position that 3D Systems finds itself in. The company last reported 9% lower sales and shrinking profitability as demand fell across all of its geographies in the third quarter.
In its most recent 10-K report, 3D Systems listed consumer applications as one of several potential "significant growth opportunities." Yet recent developments have apparently convinced executives that the market just isn't attractive enough to warrant continued investment.