My Yahoo!Forbes Wrapup: The Penney Drops
NEW YORK - Retail stocks fell today after J.C. Penney reported lower same-store sales for February.
The retailers were today's Forbes.com sector to watch, and they received a boost from Tiffany (nyse: TIF - news - people) this morning when the jeweler expressed confidence about meeting Wall Street's expectations for fiscal 2001.
Stock To Watch: Gateway (chart)
Sector To Watch: Retail
Dog Of The Day: Travelocity.com
But Penney's (nyse: JCP - news - people) bad news apparently offset Tiffany's good news. Penney's said same-store sales fell 2.1% for the four weeks ended Feb. 24. Tiffany eked out a 0.4% gain today, but Penney fell 4.5% and the Standard & Poor's Retail Index declined 2.7%.
Perhaps the group simply was due for a fall. Peter Blatchford, a Miller Tabak trader, notes that the retailers have performed well lately despite a spate of profit disappointments. "The group has been stellar," he says. "They've shrugged off every pre-announcement. This could just be some profit-taking."
Personal-computer stocks were routed today by Gateway's profit warning. Gateway, today's Forbes.com Stock to Watch, dismayed investors by saying it will take a larger-than-expected charge against profits for the first quarter, as part of its restructuring plan.
Gateway also restated last year's results. Investors retaliated by slashing Gateway's stock price to $15.75 from $17.20, a loss of 8.4% on the day. Dell Computer (nasdaq: DELL - news - people) and Compaq Computer (nyse: CPQ - news - people) traded down on the news.
The Forbes.com Dog Of The Day was Travelocity.com (nasdaq: TVLY - news - people), which lost a third of its market value after Northwest Airlines (nasdaq: NWAC - news - people) said it would stop paying commissions to Internet-based travel agencies. Travelocity derives substantial revenue from such commissions, so the company would be hurt if other airlines decide to follow Northwest's lead. The stock fell 32.6% to end the day at $15.
Expedia (nasdaq: EXPE - news - people), another Web-based travel agent, fell 17.2% on the news. But Priceline.com (nasdaq: PCLN - news - people) took less of a hit today, falling only 4.7%. Priceline presumably was spared because it does not get commissions; it makes money on the spread between what a customer offers for a ticket and what Priceline pays the airlines.
Come back before the bell for the Forbes Forecast.
Then join us for lunch to learn the Dog Of The Day.
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