Startled by the likely reality that Greece may not get bailed out before it defaults on its loans, investors were more than happy to bail out of stocks to get the new week started. The S&P 500’s close of 2,057.64 today was 2.09% below Friday’s closing level.
The losers weren’t hard to find on Wall Street today. Macy’s, Inc. (NYSE:M), Charles Schwab Corp. (NYSE:SCHW) and Western Digital Corp. (NASDAQ:WDC), however, were hit particularly hard by the marketwide headwind.
Charles Schwab (SCHW)
Don’t look for a specific reason Charles Schwab shares were deep underwater today; you won’t find one. Just blame the market. Its demise forced investors to consider the possibility that stock-trading could dry up in a hurry if things get any worse for the market, and SCHW was the biggest and best target, losing 3.8% of its value.
Not far behind was peer and competitor TD Ameritrade Holding Corp. (NYSE:AMTD), which lost 3.7% of its value on Monday. While not as steep as the selloff from SCHW, both major online brokerage houses were among the top 20 losers among U.S. stock on Monday, so there’s no denying traders were targeting the industry as much as they were targeting specific companies.
Western Digital (WDC)
Just when you think it can’t get any worse for hard-disk drive maker Western Digital, it gets worse. Already down nearly 24% year-to-date, today’s 3% drop from WDC brings the total loss to a stunning 26%.
The prompt for today’s portion of the rout was given to WDC shareholders courtesy of Jefferies, which lowered its price target on Western Digital shares from $123 to $116. The investment research firm did not, however, lower its rating on WDC from a “buy.” Jefferies broadly feels Western Digital is struggling in the shadow of a deteriorating PC market.
The Jefferies aligns with a similar concern posted by JP Morgan last week, which suggest Western Digital will see more than a 10% decline in shipments this year followed by another small dip next year.
Macy’s (M)
WDC wasn’t the only name to suffer from an analysts downgrade today. Department store Macy’s saw its stock fall nearly 4% after Deutche Bank downgraded shares all the way from a “buy” to a “sell” due to tepid earnings growth.
Deutsche Bank analyst Paul Trussell explained:
“We are concerned as Macy’s quarterly two-year same-store sales trend has dipped into negative territory for the first time in the past 15 years outside the two periods associated with the recessions…While activewear remains a bright spot … demand for the categories of items that Macy’s sells has generally waned.”
Trussell also lowered his price target on M, from $71 to $63.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
