Takeaways
- The S&P 500 dropped 2.0% on Friday, March 28, as the Federal Reserve's preferred measure of inflation revealed intensifying price pressure.
- Lululemon’s shares fell after the apparel retailer gave a disappointing outlook. The retailer cited a softening of traffic as consumers cut back on spending.
- Shares of W.R. Berkley moved higher as the insurer announced that Japan's Mitsui Sumitomo Insurance would take a 15% stake in the company.
Major U.S. equities indexes tumbled after Friday's inflation report came in hot, and consumer sentiment weakened significantly.
The S&P 500 lost 2.0% in the week’s final trading session. The Dow closed at a lower level of 1.7% while the Nasdaq dropped 2.7%. All three of the major market indicators ended the week in the negative as persistent inflation and consumer unease exacerbated worries about the economy and escalating trade tariffs.
Lululemon Athletica (LULU) shares suffered the heaviest losses of any S&P 500 stock, plummeting 14.2% after the maker of yoga pants and other workout attire released its quarterly results. Lululemon beat sales and profit expectations for its fiscal fourth-quarter, but the apparel company provided lower-than expected guidance for the current year and quarter. Executives cited an increase in traffic as customers cut back on spending in an uncertain economy. Analysts at JPMorgan cut their price target for the stock, citing that tariffs and currency effects could affect profit margins.
Warner Bros. Discovery (WBD), a film studio owned by the entertainment giant, saw its shares fall 5.8% in response to a New York Times report about CEO David Zaslav struggling to revitalize it. The article noted that ticket sales are still 40% below what they were last year. The entertainment giant announced a reorganization for its streaming content acquisition teams in order to align its strategy across regions.
Dollar Tree’s (DLTR), shares fell 5.5%, reversing some of the gains since the discount retailer made an announcement earlier this week to sell its Family Dollar Brand for $1 billion. Analysts said Dollar Tree was in a strong position to attract value-conscious customers and could see a boost in earnings following its separation from Family Dollar. However, they also pointed out potential tariff-related headwinds.
W.R. Berkley (WRB) shares surged 7.5%, notching the top performance in the S&P 500 and reaching a record high after the insurance firm announced that Japan’s Mitsui Sumitomo Insurance (MSI) would acquire a 15% stake in the company. According to the statement, MSI plans to purchase shares from third parties and on the open markets as it builds up its position. The release stated that this agreement would not impact the firm’s normal operations.
Shares of Welltower (WELL), a real estate investment trust (REIT) focused on medical facilities and other health care infrastructure, added 2.3% after credit rating agency S&P Global upgraded its issuer rating. Welltower’s credit metrics are expected to improve over the next two-year period.
American Water Works, the largest regulated U.S. water and wastewater utility, announced a $40 billion plan to invest in its national network over the next ten years. The company’s stock rose by 2.2% Friday.
