Earnings Season Is Taking Its Toll On These 3 Stocks

GILD stock just dipped below a critical trendline

Managing Editor
Oct 27, 2017 at 2:53 PM
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Stocks are higher this afternoon, but its the Nasdaq Composite (COMP) that's stolen the show on its way to a new record high. However, not all of the day's action is to the upside, with tech name Super Micro Computer, Inc. (NASDAQ:SMCI), retail stock Macy's Inc (NYSE: M), and biotech Gilead Sciences, Inc. (NASDAQ:GILD) all spiraling. Here's a quick look at what's moving shares of SMCI, M, and GILD.

Super Micro Computer Stock Sinks After Earnings Miss

Super Micro Computer stock is down 7.7% to trade at $20.02, among the worst on the Nasdaq Composite today and currently short-sale restricted, after the company delivered a first-quarter earnings report that fell short of Wall Street's expectations. The computer hardware company also lowered its fiscal year outlook, and its accounting review is still delayed. In response, D.A. Davidson lowered its price target to $23 from $27.

The drop today took SMCI to a three-and-a-half year low of $17.70, and puts its 2017 loss at 29%. Short sellers are likely cheering SMCI's tumble. While short interest decreased during the last reporting period, the 5.60 million shares sold short represents over 14% of SMCI's total available float. 

Macy's Stock Hurt By J C Penny's Plunge

Macy's stock is down 7% to trade at $19.86, dragged lower as rival JC Penny (JCP) suffers from an abysmal earnings report. M stock is now back below its 40-day moving average, a trendline that has alternated between support and resistance since July. The drop today has the equity, which has now shed 44.6% year-to-date, flirting with a seven-year low. Macy's will report earnings on Nov. 9.

Short sellers have been ramping up their bearish exposure to M stock in recent weeks. Short interest surged 22.5% in the most recent reporting period to 51.85 million shares -- the most on record. This represents over 17% of M's total available float.

Solid Earnings Not Enough For GILD Stock To Overcome Hepatitis C Drug Concerns

Gilead Sciences stock is down 2.7% to trade at $75.84, despite the biotech company delivering a third-quarter earnings and revenue beat. The company's hepatitis C drugs continued to struggle, and this prompted three price-target cuts from brokerages, including to $82 from $83 at Morgan Stanley. The drop today takes GILD shares below their 100-day moving average for the first time since mid-June. 

Analysts remain split over GILD stock. Of the 20 brokerages covering the biotech name, nine rate it a "strong buy" or "buy," while the other nine rate it a "hold." Continued technical struggles could have analysts rethinking their upbeat outlooks.

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