Why Qualcomm, Dollar General, and Express Slumped Today

The stock market saw different cross-currents on Thursday, with areas like energy continuing to climb higher even as technology and other former highfliers gave up some ground. Most market commentators attributed the moves to sector rotation, spurred at least in part by the results of November's elections. Major market benchmarks finished anywhere from up a third of a percent to down well over 1%, but some stocks fell even more than that. Among them were Qualcomm (NASDAQ: QCOM), Dollar General (NYSE: DG), and Express (NYSE: EXPR). Below, we'll look more closely at these stocks to tell you why they did so poorly.

Image source: Qualcomm.

Qualcomm follows chips lower

Qualcomm dropped 6% on a tough day for the technology space generally and for the semiconductor equipment, design, and manufacturing groups in particular. Some have pointed to the recent rise in interest rates and the corresponding boost to the value of the U.S. dollar against major foreign currencies as one reason why major technology companies like Qualcomm are suffering, because they get much of their revenue and profit from selling their product overseas. Others believe that the issue is even more general than that, noting that the technology sector has acted as a safe haven for capital for years and suggesting that a rotation into other sectors could represent a greater willingness to take risk. Either way, the disparity in performance between Qualcomm and large-cap stocks in other sectors is noteworthy, and if it continues, it could point to a brand-new dynamic for investors to get used to seeing.

Dollar General has a tough quarter

Dollar General fell 5% after the dollar-store retailer reported its fiscal third-quarter results Thursday morning. The company saw net income fall 7% despite a 5% rise in revenue, with same-store sales declines of 0.1% stemming largely from poor performance in seasonal, apparel, and home products. Gains in average transaction amount almost offset falling traffic, and the consumables category performed well, but rising labor and occupancy costs boosted expenses and weighed on Dollar General's bottom line. Looking forward, Dollar General said it now expects earnings-per-share growth to come in toward the lower end of its previous 10% to 15% range, and that was discouraging for investors looking for healthier performance.

Express slows down

Finally, Express sank 20%. The apparel retailer reported fiscal third-quarter results that fell short of expectations and gave downbeat guidance for the future as well. Net sales for the quarter fell 7%, with an 8% drop in comparable sales, and operating income dropped by nearly two-thirds. Looking ahead, the picture looks even bleaker, with low double-digit percentage drops in comps expected for the fourth quarter and earnings declines of more than 50%. Full-year guidance was also weak, including adjusted earnings of just $0.78 to $0.82 per share and comparable sales down in the high single-digit percentages. Although the retailer has tried to explain to its shareholders that it's in the midst of a restructuring process, a challenging holiday season is the last thing that Express investors want to face right now.

10 stocks we like better than Qualcomm When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Qualcomm wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 7, 2016

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.