SHEL - Hot Stocks: Retailers decline; SHOP drops on layoffs; SHLX jumps on merger; TRU falls; SCHL sets 52-week high

Stocks finished notably lower on Tuesday, amid concerns about corporate earnings and the Federal Reserve's upcoming interest-rate decision. The Nasdaq led the slide, falling by 1.9%.

The retail sector contributed to the decline, dragged down by a disappointing forecast from Walmart. The slide included notable losses from Kohl's ( KSS ), Macy's ( M ), Target ( TGT ) and Costco ( COST ).

Shopify ( NYSE: SHOP ) represented another high-profile decliner. Reports of job cuts sent the stock sharply lower.

Elsewhere, TransUnion ( TRU ) dropped on weak earnings news, falling to a new 52-week low.

On the other side of the spectrum, Shell Midstream Partners ( SHLX ) jumped on news of a takeover deal. Meanwhile, Scholastic ( SCHL ) added to an earnings-inspired rally that began last week, reaching a fresh 52-week high.

Sector In Focus

A warning from Walmart and word of job cuts at Shopify sparked overall selling in the retail sector. Investors worried that high inflation and a weakening economy will force consumers to cut back on their spending.

With the general sector seeing a selloff, Kohl's ( KSS ) was one of the standouts to the downside. The stock dropped 9% on the session. Macy's ( M ) also helped lead the group lower, falling by 7%.

Target ( TGT ) retreated almost 4%, while Costco ( COST ) fell 3%.

Standout Gainer

News of a merger deal sparked buying in Shell Midstream Partners ( SHLX ). The stock jumped more than 10% after the firm agreed to be acquired by Shell USA ( SHEL ) in a deal worth $1.9B.

Under the agreement, SHEL will pay $15.85 for each SHLX unit that it does not already own. SHEL already holds a 68.5% stake in SHLX.

Boosted by the deal, SHLX closed at $16.05, an advance of $1.50 on the day. The rally added to gains posted earlier in the year. The stock has climbed 26% in 2022.

Standout Loser

Reports of large-scale layoffs prompted selling in shares of Shopify ( SHOP ). The stock retreated 14% on the news.

Citing an internal memo, the Wall Street Journal reported that the ecommerce platform plans to cut about 1K jobs , representing about 10% of its global workforce. The move comes as online shopping growth wanes, due to dissipating pandemic effects and a slowing overall economy.

SHOP dropped $5.34 to close at $31.55. The retreat took the stock back to the low end of a trading range that has held it since May. With losses posted earlier in the year, SHOP has now dropped 61% in 2022.

Notable New High

Scholastic ( SCHL ) extended a post-earnings rally that began last week. Shares climbed another 4% to reach a 52-week high.

Late last Thursday, the educational book publisher reported Q4 operating income that jumped 28% from the previous year on revenue that also grew by 28% . The firm projected revenue growth of 8%-10% for fiscal 2023.

In response to the quarterly update, SCHL soared nearly 13% on Friday. The stock added to its gains with another 3% advance on Monday. Tuesday's session saw another extension of the rally, with the stock rising an additional $1.86 to close at $44.84.

SCHL has now finished higher in eight of the last nine sessions. The stock has climbed 25% in the past month. With Tuesday's action, shares reached an intraday 52-week high of $44.87.

Notable New Low

TransUnion ( TRU ) lost ground following the release of its quarterly results, sending the stock to a new 52-week low. With the firm announcing disappointing revenue and a weak outlook, TRU dropped nearly 14%.

The data analytics firm announced quarterly revenue that jumped 30% from last year to reach $948M. However, the total came in shy of analysts' projections.

Looking ahead, the company predicted revenue for 2022 of $3.74B-$3.79B. Analysts were looking for a figure of around $3.85B.

Based on the quarterly report, TRU slumped to an intraday 52-week low of $75.03. Shares ticked off that nadir before the close, eventually ending the day at $75.52. This represented a decline of $12.08 on the day.

With the slide, TRU dipped below a recent trading range, extending the weakness seen earlier in the year. The stock has fallen 35% in 2022.

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