UAA - Why Retail Stocks Were Diving Yesterday
Retail stocks were plunging again Monday as the broad market fell sharply on concerns about the expanding coronavirus outbreak. Schools are closing in a number of states across the country, and restaurants are being told to close with the exception of takeout and delivery in New York, New Jersey, Connecticut, and other cities and states. A number of retailers responded to the outbreak by announcing temporary store closings or cut hours.
Additionally, an emergency rate cut by the Federal Reserve and a promise of $700 billion in quantitative easing failed to assuage investors. In fact, it may have signaled the severity of the crisis we're entering.
Consumer discretionary stocks are getting hit broadly as more Americans are being forced to stay at home. As of 2:32 p.m. EDT yesterday, among the big losers in retail were Under Armour (NYSE: UA) (NYSE: UAA), which was down 10.3%; Kohl's (NYSE: KSS), off 15.8%; Gap (NYSE: GPS), which had plunged 26.3%; Best Buy (NYSE: BBY), down 7%; and Macy's (NYSE: M), which was off 14%. At the same time, the S&P 500 was down 8.5%.