JWN Logs Worst Day in a Year; Icahn Sends AFSI North of Buyout Price

It's another dismal May earnings reaction for Nordstrom stock today

Managing Editor
May 18, 2018 at 3:20 PM
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Stocks are a mixed bag this afternoon, as traders weigh some lackluster big-cap earnings against renewed trade concerns with China. Among stocks making particular noise today, Google parent Alphabet Inc (NASDAQ:GOOGL) and retailer Nordstrom, Inc. (NYSE:JWN) are headed lower, while banking concern AmTrust Financial (NASDAQ:AFSI) is gapping higher. Here's a closer look at what has shares of GOOGL, JWN, and AFSI moving today.

GOOGL Stock Slips Ahead of 60 Minutes Feature

This Sunday, CBS news show 60 Minutes will air a feature called "The Power of Google", centered around the antitrust concerns plaguing the tech giant. Ahead of the airing, Alphabet stock is down 1.1% to trade at $1,070.31. The shares have pulled back to their 160-day moving average, a trendline that has provided increasingly unreliable support in 2018.

Analysts remain upbeat on the stock. Of the 29 brokerages covering GOOGL, 26 rate it a "buy" or "strong buy," with zero "sells" on the books. Furthermore, the security's average 12-month price target of $1,257.98 represents an 18% premium to the stock's current perch.

Subpar Same-Store Sales Bury Nordstrom Stock

Unable to rely on Macy's (M) halo lift anymore, Nordstrom stock is down 10.3% to trade at $45.71 -- near the bottom of the New York Stock Exchange (NYSE) today -- after the retailer reported first-quarter same-store sales that missed expectations. In response, J.P. Morgan Securities cut its price target to $53 from $58, while Cowen lowered its target to $56 from $60.

JWN stock is now on track for its worst daily loss since May 12, 2017 -- another post-earnings sell-off. The shares are also in danger of closing below their 200-day moving average for the first time since late November.

Although Nordstrom stock is currently on the short-sale restricted (SSR) list, shorts are likely cheering today's collapse. Roughly 14% of JWN's total available float is sold short, representing 10.2 times the stock's average daily trading volume.

Call Buyers Flock to AFSI as Icahn Challenges Board

AmTrust Financial stock is up 2.4% to trade at $13.75, after activist investor Carl Icahn disclosed a 9.4% stake in the insurance company. In an open letter to the board, Icahn blasted the AFSI's "opportunistic" plans to go private, insisting in an open letter that the board was “blatantly taking advantage” of the company’s minority shareholders.

Today's rally has carried AFSI stock above the $13.50-per-share cash buyout price agreed to by Evergreen Parent -- a group that includes the founding family and CEO of AmTrust. In response, call volume has exploded. Over 15,000 calls have changed hands today -- a whopping 55 times the expected intraday volume, and in the 100th percentile of its annual range. The most popular strike is the out-of-the-money June 15 call, where some traders are buying to open new contracts.

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