The Market's New Message: Show Me the Money Now!
The stock market has a reputation for looking ahead.
That's why equity prices tend to predict shifts in the economy six to nine months before they happen. It's also why investors recently punished shares of the credit card giant Visa after the company posted solid earnings but hinted that revenues later in the year would fall short of expectations.
Still, there are times when Wall Street adjusts its perspective and focuses on the here and now. And Friday was one of those occasions.
In what turned out to be a rather brutal end of the week, investors gave companies—including some of the market's darlings of the past few years—an extremely short leash. Those that lived up to their promise came out relatively unscathed, but those that fell short got hammered.
Just ask Jeff Bezos and Mark Zuckerberg.
For years, Bezos' Amazon.com soared as it posted robust sales growth while promising strong earnings were just around the corner. The e-commerce giant delivered the exact same message (and results) when it announced its quarterly earnings last week. This time, though, investors responded by erasing $16 billion of market value from the company in half the time it takes the company to deliver packages to its Prime membership customers.
Other examples of companies that couldn't deliver on growth and earnings now were the streaming music service Pandora Media and Dunkin' Brands , the parent company of the Dunkin' Donuts chain, which is struggling to fight off Starbucks and McDonald's in the coffee wars.
DNKN Price data by YCharts
On the flip side, Zuckerberg's Facebook not only blew past Wall Street's revenue and earnings expectations in the recent quarter, it proved that it was making big strides in mobile advertising, the area the social network giant's investors were most worried about in recent years.
Not surprisingly, shares of Facebook—and other companies firing on all cylinders, such as Starbucks —defied the market's end-of-the-week sell-off and are at or near their all-time record highs.
Here's a closer look at the week's winners and losers:
Amazon and Pandora Slammed by Wall Street for Weak Earnings
Dunkin, Mickey D's, or Starbucks? The Surprising Winner of the Coffee War
Facebook's Next Battle is Wrestling Your Credit Card Number from Amazon