Stocks managed their biggest daily gain of the new year today, as a rebound in oil prices helped energy companies push indexes broadly higher. The Dow Jones Industrial Average gained 227 points, or 1.4%, and the S&P 500 rose by 32 points, or 1.7%.
A few companies made dramatic moves lower in spite of the heavy buying volumes today. These underperformers include GoPro and Best Buy , which both revealed worsening business trends during the just-finished holiday season.
GoPro's fourth-quarter warning
Video-capture device-maker GoPro fell 14% today, which brought the stock's collapse to a stunning 80% since early August. The latest drop came after the company announced surprisingly weak preliminary fourth-quarter results .
Image source: Best Buy.
The main reason behind the return to falling sales was the surprisingly weak performance of the mobile phone category during the holidays, Joly said. Slumping smartphone sales overwhelmed encouraging growth that the retailer booked in other categories, including wearables, home theater, and appliances.
The good news is that Best Buy held the line on pricing, and didn't resort to hefty promotions to keep sales figures rising. As a result, profitability stayed put, rather than falling, as management had predicted in November.
"Despite a slightly softer-than-expected topline," Joly said, "we are improving our fourth quarter operating income rate outlook as a result of our continuing conviction to a disciplined promotional strategy and strong expense management."
Profit improvements aside, investors are looking for steady comps growth as evidence that Best Buy's turnaround plan is gaining traction. Shareholders didn't get that result in 2015 , and today's figures don't provide much in the way of positive momentum heading into 2016.
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The article Why GoPro Inc. and Best Buy Slumped as Stocks Rallied originally appeared on Fool.com.
Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool owns shares of and recommends GoPro. 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 .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
