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New figures pointing to ongoing strength in the labor market contributed to a sharp Wall Street selloff on Thursday. Investors worried that a resilient job market will leave the door open for aggressive Federal Reserve rate increases, with the Nasdaq leading the retreat with a 2.8% drop.

Car dealer stocks were among the standout decliners on the session. A weak earnings report from CarMax (KMX) spurred a retreat in other names in the sector, with losses from the likes of Carvana (CVNA), AutoNation (AN) and Group 1 Automotive (GPI).

Earnings news also put pressure on Rite Aid (NYSE:RAD). Shares lost more than a quarter of their value amid weak results and a lowered forecast.

Elsewhere, Peloton (PTON) was among the high-profile names to set a new 52-week low on the day. Concerns about the margin implications of a new retail partnership contributed to the slide.

Looking at one of the day’s standout winners, RenaissanceRe Holdings (RNR) bucked the overall trend on the day. The stock pushed higher as the impact of Hurricane Ian reassured investors about the firm’s pricing power.

Sector In Focus

A disastrous earnings report from CarMax (KMX) sparked an overall investor exodus from car dealer stocks.

KMX plunged 26% after releasing Q2 results that missed expectations. This came as the company’s combined retail and wholesale used vehicle unit sales dropped 10.3% from last year.

The extent of the decline was blamed on signs of overall demand destruction, with analysts like Morgan Stanley pointing to a buyer’s strike against high used auto prices. An increase in loan rates also likely impacted demand, the firm said.

Given this macro picture, investors indulged in a strike of their own, taking the sector’s big names sharply lower. Carvana (CVNA) dropped nearly 20%. AutoNation (AN) fell 10% and Group 1 Automotive (GPI) declined 9%.

Standout Gainer

Amid broad weakness for the overall market, property and casualty (P&C) insurer, reinsurance and insurance brokerage stocks showed strength. The gains happened even as Hurricane Ian battered Florida, leading to large-scale flooding and sizable property damage.

RenaissanceRe Holdings (RNR) was among the winners in the sector, rising by about 4.5%. Some names in the industry received a boost in the wake of the hurricane on bets that they will see increased pricing power.

RNR finished at $145.31, an advance of $6.30 on the session. This continued a climb that has marked most of the week so far, recovering some of the losses posted last week.

Standout Decliner

The release of quarterly results sent shares of Rite Aid (RAD) spiraling. The drug store chain saw its stock plummet by 28%.

The selloff came after RAD announced a disappointing bottom line for its latest quarter. The firm also lowered its guidance for the full year.

“As we look to the second half of the year, we expect continued pressure on consumer spending and supply chain challenges,” Chief Executive Heyward Donigan said of the outlook.

RAD dropped $1.97 to close at $5.06. The stock remains above a 52-week low of $4.68 reached in May. Shares have lost two-thirds of their value since the end of 2021.

Notable New Low

A risk-off attitude on Wall Street led to a selling spree in Peloton (PTON), with the slide exacerbated by a retail distribution deal that raised concerns about margins.

The exercise equipment maker, which is in the middle of an attempted turnaround after its pandemic demand evaporated over the past year and a half, dropped another 14% on Thursday to record a new 52-week low. The decline came amid a new partnership with Dick’s Sporting Goods, which will see the sporting goods retailer selling PTON products in its stores.

PTON plunged to an intraday 52-week low of $6.82. Shares trimmed their losses later in the session, eventually closing at $7.05. This represented a decline of $1.19 on the day.

Shares have lost more than 90% of their value over the past 12 months. PTON traded above $170 at one point in early 2021.

For more of the day’s biggest winners and losers, head over to Seeking Alpha’s On The Move section.


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