Stocks tumbled today on new fears the Federal Reserve may soon begin to scale back its bond buying program. Atlanta Fed president Dennis Lockhart said today that tapering could start as soon as September when the Federal Open Market Committee holds its next meeting. Chicago Fed president Charles Evans added to concerns stating the central bank could fully wind down its asset purchases by mid-2014.
Shares of The Washington Post (WPO) company climbed 4% on news that Amazon (AMZN) founder and CEO Jeff Bezos is buying the company's newspaper and publishing business for $250 million. The money will come from Bezos himself and is not going to be an Amazon entity. The deal does not include WAPO's online magazine Slate, Foreign Policy or TheRoot.com. They will remain part of the publicly traded company.
Sony (SNE) fell nearly 5% today. The company has rejected a call by analyst investor Daniel Loeb to split itself in two. Loeb wants the Japanese giant to spin off part of its entertainment division as a way of isolating its ailing electronics arm. But today the company praised its current structure saying it allows for unique synergies. Loeb, for his part, is vowing to keep putting pressure on Sony for some sort of change. His efforts have helped drive the stock up more than 80% year-to-date.
American Eagle Outfitters (AEO) tumbled 12% on a profit warning. The teen retailer says its earnings for the second-quarter will probably be less than half of what analysts were expecting. The company blames its troubles on a weak labor market that has left many teens jobless, and without money to spend. It also cites an environment of deep discounts. Prior to today stock had been down fractionally since the start of 2013.
Fossil (FOSL) shot up 18% following a rock solid earnings report. The company posted profits of $1.15 a share when estimates were for 93-cents, which was the figure a year ago. Revenue also exceeded expectations. Shares had dropped 6% yesterday on a downgrade to underweight from equal weight. Barclays analyst Matthew McClintock predicted sales for the chain were slowing. In reality they grew 18% for the period. Growth was particularly strong in China, Japan and India.
CVS Caremark (CVS) fell nearly 3% after releasing quarterly results. The pharmacy giant beat earnings estimates on an adjusted basis; it posted profits of 97-cents a share when expectations has been for 96-cents. The company also beat on revenues with $31.28-billion compared to estimates of $31.14-billion. CVS says its profits jumped 16% from a year ago largely on strong margins from generic drugs. The stock's move down comes after setting several new all-time highs this summer.
Dish Network (DISH) rose 0.5% despite a disappointing earnings report. The company posted losses of 2-cents a share when analysts were looking for profits of 50-cents. Dish took a $438-million charge related to satellite acquisitions. It also saw a decline in subscriptions for the period.
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