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Markets Sell Off on Rise in COVID Cases; KB Home Misses Ests
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As we saw during today’s pre-market trading activity, investors took a break from buying this Wednesday, booking profits across the board and bringing each of the major U.S. indexes down 2% or more. At one point, the Dow 30 fell by 859 points, but finished down 708.79, -2.7%. The S&P 500 fared only slightly better, -2.58%, -80.82 points. The Nasdaq, posting its first lower close in the last 9 sessions, dropped by 2.19%, -222.2 points.
One reason for the markets hitting the breaks is today’s news headlines regarding a resurgence in COVID-19 cases in the U.S. Following 6 weeks of lowering levels ahead of the economy reopening, we are starting to see nasty spikes in new cases from certain states that reopened earlier than others. On Tuesday, 34,700 new cases marked the 3rd-highest day since the pandemic began, with record single-day cases in several states, including California and Texas, the top two most populous states in the nation.
As a result, S&P 500 stocks like Norwegian Cruise Lines (NCLH - Free Report) , which fell 12.4%, and Wynn Resorts (WYNN - Free Report) , down 11%, took a hit as indoor public entertainment facilities again fall out of favor. On the Nasdaq, Expedia (EXPE - Free Report) sank 6.2% Wednesday. Many of these companies had been bid up in recent weeks on reopening exuberance; every so often, reality manages to seep into sentiment.
Homebuilders were trading down Wednesday, even after an unexpected bump up in New Home Sales reported yesterday. Keeping up with demand is now a challenge for companies which had laid off workforce during the peak of the pandemic and stalled land-buying initiatives. Also, permits heading lower in the last week may set the near-term direction for housing starts when they report next month.
After the bell, KB Home (KBH - Free Report) posted fiscal Q2 earnings, with results missing on both top and bottom lines. Earnings of 55 cents per share was 2 cents shy of Zacks consensus, and the first time KB Home has missed on earnings in more than 4 years. Revenues also came in light: $914 million versus the $1.07 billion analysts were expecting. Homes delivered were down from a year ago, and the average selling price of each unit slimmed slightly, though gross profit margin rose an even 100 basis points in the quarter.
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Markets Sell Off on Rise in COVID Cases; KB Home Misses Ests
As we saw during today’s pre-market trading activity, investors took a break from buying this Wednesday, booking profits across the board and bringing each of the major U.S. indexes down 2% or more. At one point, the Dow 30 fell by 859 points, but finished down 708.79, -2.7%. The S&P 500 fared only slightly better, -2.58%, -80.82 points. The Nasdaq, posting its first lower close in the last 9 sessions, dropped by 2.19%, -222.2 points.
One reason for the markets hitting the breaks is today’s news headlines regarding a resurgence in COVID-19 cases in the U.S. Following 6 weeks of lowering levels ahead of the economy reopening, we are starting to see nasty spikes in new cases from certain states that reopened earlier than others. On Tuesday, 34,700 new cases marked the 3rd-highest day since the pandemic began, with record single-day cases in several states, including California and Texas, the top two most populous states in the nation.
As a result, S&P 500 stocks like Norwegian Cruise Lines (NCLH - Free Report) , which fell 12.4%, and Wynn Resorts (WYNN - Free Report) , down 11%, took a hit as indoor public entertainment facilities again fall out of favor. On the Nasdaq, Expedia (EXPE - Free Report) sank 6.2% Wednesday. Many of these companies had been bid up in recent weeks on reopening exuberance; every so often, reality manages to seep into sentiment.
Homebuilders were trading down Wednesday, even after an unexpected bump up in New Home Sales reported yesterday. Keeping up with demand is now a challenge for companies which had laid off workforce during the peak of the pandemic and stalled land-buying initiatives. Also, permits heading lower in the last week may set the near-term direction for housing starts when they report next month.
After the bell, KB Home (KBH - Free Report) posted fiscal Q2 earnings, with results missing on both top and bottom lines. Earnings of 55 cents per share was 2 cents shy of Zacks consensus, and the first time KB Home has missed on earnings in more than 4 years. Revenues also came in light: $914 million versus the $1.07 billion analysts were expecting. Homes delivered were down from a year ago, and the average selling price of each unit slimmed slightly, though gross profit margin rose an even 100 basis points in the quarter.
Free Book: Finding #1 Stocks
In this 300-page hardcover, Zacks' Executive VP Kevin Matras reveals almost every stock-picking secret he’s learned from the system that since 1988 has more than doubled the average yearly gain of the S&P 500.
Learn more now >>