Stocks ended the day higher, but not everyone rode the rally. Scoreboard:
S&P 500: 1,873.36, +0.30%
NASDAQ: 4,048.92, -0.78%
Whole Foods Shares Puréed. Whole Foods shares fell nearly 19% Wednesday following CEO John Mackey’s acknowledgment of the increasingly competitive market for organic. “The growing demand for fresh healthy foods, the offering of natural and organic products is expanding everywhere and new stores, existing stores and online,” he said on the firm’s Q1 earnings call. The firm came in well short of estimates
Analysts Not Happy. Mackey’s call followed earnings and comp sales figures that fell well short of forecasts. Sell-side research guys covering Whole Foods did not find his explanation of “more competition” an adequate explanation for the miss, BI’s Ashley Lutz reports. “I’ve got to be honest. I’m not really hearing anything that’s suggesting management is taking this situation as seriously as some investors want you to,” Ken Goldman at JPMorgan said. “There’s a lot of talk about what’s going, not a lot to talk about what it takes to win the change market.”
Other Losers. Groupon fell 23% after a bunch of folks cut their price targets. First Solar was off more than 7%. Twitter was down 4.5%. Tesla fell 3.5%.
Yellen Warns On Housing. In prepared remarks before Congress today, Fed Chair Janet Yellen warned the housing market was showing signs of weakness. TD Securities’ Millan Mulraine characterised this as “an important departure from the past upbeat tone on the economic outlook.” Lately, various housing-market metrics such as existing-home sales, new-home sales, and mortgage applications have all been flagging. Last week, we learned that the U.S. homeownership rate was at a 19-year low, and some experts think it will never come back. “[T]he Fed is beginning to recognise that the biggest drop in affordability in more than 30 years is a serious drag on activity,” said Pantheon Macroeconomics’ Ian Shepherdson.
Consumer Credit. Consumer credit balances increased by $US17.5 billion in March to a total of $US3.141 trillion. It was the biggest month-over-month growth rate since February 2013, Bloomberg said, and was well ahead of forecasts.
Earnings. Stay tuned for Tesla and SolarCity.
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