With no major economic news and little meaningful earnings news to respond to, traders kept the indices fairly close to home on Thursday. By the time the closing bell rang, the S&P 500 had only gained 0.22% to end the session at 2187.01.
Not every name escaped the day unscathed, however. Twitter Inc (NYSE:TWTR), Agilent Technologies Inc (NYSE:A) and Corrections Corp Of America (NYSE:CXW) were each up-ended by news unique to them.
Twitter Inc (TWTR)
Already feeling the weight of its recent gains, Twitter made for a big target today on the heels of a well-reasoned downgrade.
Evercore ISI did the deed, downgrading TWTR from a “Hold” to a “Sell,” and cutting its target price on the stock from $18 to $17 due to the company’s lack of deep interest in artificial intelligence learning.
Analyst Ken Sena explained:
“Twitter’s top priority for 2016 was refining the core Twitter platform and product. However, following last year’s launch of Moments, and the introduction of a non-linear timeline, we have not seen anything so far this year that was quite as transformational. By comparison, Snapchat overhauled its Discover experience and chat while making a clear push to go after Twitter creators and influencers.”
Sena simply sees more risk than reward with TWTR, which closed almost 6% lower on Thursday.
Agilent Technologies Inc (A)
Agilent Technologies may have done fairly well (relative to expectations) last quarter, but a lackluster outlook sent A shares tumbling to the tune of a 3.5% loss.
In its recently completed third fiscal quarter of the year, Agilent earned 49 cents per share on $1.04 billion in revenue. Although the top line fell a bit short of the $1.05 billion analysts were expecting, it was still up 3% from year-ago levels, and earnings topped estimates for a profit of 47 cents per share of A stock.
The selloff was spurred by the company’s outlook for the rest of the year. The medical device company reiterated its profit guidance of between $1.89 and $1.91 per share of A stock, on revenue of between $4.14 billion to $4.16 billion. The pros were expecting an average profit of $1.91 per share n sales of $4.18 billion.
Corrections Corp Of America (CXW)
In terms of the day’s total loss, rival prison operator The GEO Group Inc (NYSE:GEO) could have just as easily earned a spot on the daily worst-three list. In terms of market cap, volume and the total amount of pain dished out on Thursday though, Corrections Corp Of America gets the dubious “worst of” honor with its 35% plunge.
The prod for the steep pullback from each for-profit prison company was news from the Department of Justice that the federal government would be phasing out corporate prisons. Audits have determined that these private facilities tend to have more security and safety problems than government-run prisons do.
It’s an issue that may not be put to rest so easily though. While Democratic Presidential candidate Hillary Clinton is on board with the idea, GOP rival Donald Trump is a supporter of privatized prisons, and may be able to resuscitate CXW and GEO.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
