What Happened?

A number of stocks fell in the afternoon session after new economic data intensified market agitation ahead of the Federal Reserve's policy decision later in the week. 

According to the Bureau of Economic Analysis, real consumer spending, which is adjusted for inflation, stalled in September, marking its weakest performance in four months. Compounding the issue, the University of Michigan's consumer sentiment index, while slightly improved, remained gloomy, with one economist noting that many households faced affordability issues forcing them to be more cautious. This pressure on consumers was reflected in the market, where the Consumer Discretionary sector was among the leading decliners. The broader economic picture showed other signs of caution, as new orders for U.S. factory goods also increased less than anticipated. These indicators collectively suggest a widening slowdown across both consumer and industrial sectors as the Federal Reserve prepared to announce its final policy actions for the year.

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:

• Apparel and Accessories company VF Corp (NYSE: VFC) fell 5.7%. Is now the time to buy VF Corp? Access our full analysis report here, it’s free for active Edge members.
• Apparel and Accessories company PVH (NYSE: PVH) fell 4.5%. Is now the time to buy PVH? Access our full analysis report here, it’s free for active Edge members.
• Casino Operator company Bally's (NYSE: BALY) fell 6.9%. Is now the time to buy Bally's? Access our full analysis report here, it’s free for active Edge members.
• Media company Warner Music Group (NASDAQ: WMG) fell 4.1%. Is now the time to buy Warner Music Group? Access our full analysis report here, it’s free for active Edge members.
• Apparel and Accessories company Under Armour (NYSE: UAA) fell 4.4%. Is now the time to buy Under Armour? Access our full analysis report here, it’s free for active Edge members.

Zooming In On Bally's (BALY)

Bally’s shares are extremely volatile and have had 70 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 17 days ago when the stock gained 8.4% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.

Bally's is down 17.9% since the beginning of the year, and at $15.97 per share, it is trading 20.2% below its 52-week high of $20 from January 2025.

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