Cal-Maine Foods saw its stock drop nearly 12% in after-hours trading following a disappointing financial report. The egg distributor reported earnings of 2 cents per share for the fiscal first quarter, well below the consensus estimate of 33 cents per share from analysts. Additionally, the company’s revenue for the quarter fell short of Wall Street’s expectations. Cal-Maine attributed the underperformance to “dynamic” market conditions, specifically noting that egg prices have normalized as supply has started to recover.
In another market development, the Dow Jones Transportation Average closed below its 200-day moving average for the first time since June. This drop may indicate a potential downtrend for the index. The decline in the Transportation Average was driven by broad stock sell-offs and surging bond yields. Notably, 13 of the stocks within the index are currently trading below their 200-day moving average. Market technicians view the 200-day moving average as an important indicator of long-term trends, and a close below this threshold could suggest further declines ahead.
Meanwhile, the probability of a quarter-point increase in the Fed’s benchmark overnight lending rate at the next policy meeting rose from 16% to 30.9%. This increase came after stronger-than-expected job openings numbers for August were reported by the Bureau of Labor Statistics. The rising probability of a rate hike reflects growing confidence in the strength of the labor market and the possibility of tighter monetary policy from the Federal Reserve.
Overall, these developments in the market point to challenges faced by Cal-Maine Foods, potential downward trends in the transportation sector, and the likelihood of a rate hike by the Fed in the near future.
