What Happened?
A number of stocks fell in the afternoon session after the latest U.S. consumer confidence report revealed underlying weakness despite a headline increase, raising concerns about future spending. While the Conference Board's headline Consumer Confidence Index rose to 97.2 in July, the details painted a more cautious picture for investors. The Present Situation Index, a measure of consumers' assessment of current business and labor market conditions, actually fell. More telling for the sector, the report showed a decline in buying intentions for major discretionary items such as homes, cars, and most appliances. This combination of factors signals potential weakness in future consumer spending, casting a shadow over companies that rely on non-essential purchases.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Leisure Facilities company AMC Entertainment (NYSE:AMC) fell 3.9%. Is now the time to buy AMC Entertainment? Access our full analysis report here, it’s free.
- Wireless, Cable and Satellite company Altice (NYSE:ATUS) fell 3.4%. Is now the time to buy Altice? Access our full analysis report here, it’s free.
- Casino Operator company PENN Entertainment (NASDAQ:PENN) fell 3%. Is now the time to buy PENN Entertainment? Access our full analysis report here, it’s free.
- Home Furnishings company Lovesac (NASDAQ:LOVE) fell 3.1%. Is now the time to buy Lovesac? Access our full analysis report here, it’s free.
- Travel and Vacation Providers company Target Hospitality (NASDAQ:TH) fell 3.6%. Is now the time to buy Target Hospitality? Access our full analysis report here, it’s free.
Zooming In On AMC Entertainment (AMC)
AMC Entertainment’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 3.4% on concerns about its recent financial performance and the general volatility associated with its status as a 'meme stock'.
Investors appeared to focus on the company's last quarterly report, which showed a 9.3% decline in revenue compared to the previous year. While the reported loss per share was slightly better than what analysts expected, the falling revenue pointed to underlying business challenges. The stock's movement also occurred within the context of broader market discussions about 'meme stocks,' a term for shares that gained popularity among retail investors online. These stocks often experienced significant price swings based on sentiment rather than just fundamental business performance, adding a layer of speculative risk for investors.
AMC Entertainment is down 25.6% since the beginning of the year, and at $2.99 per share, it is trading 43.7% below its 52-week high of $5.31 from July 2024. Investors who bought $1,000 worth of AMC Entertainment’s shares 5 years ago would now be looking at an investment worth $81.46.
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