What Happened?
A number of stocks fell in the afternoon session after reports showed that wholesale inflation accelerated more sharply than anticipated in April.
The Producer Price Index (PPI), which measures inflation at the wholesale level, jumped a seasonally adjusted 1.4% for the month, significantly higher than the 0.5% economists had expected. This data follows a recent Consumer Price Index (CPI) report showing consumer inflation rising at its fastest pace in over three years. These rising prices, particularly for energy, weighed on household budgets, eroding purchasing power.
Compounding the issue, real wages, which account for inflation, declined for the first time in three years. This combination of higher costs and reduced disposable income dampened consumer confidence and raised concerns about future spending on non-essential goods and services.
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:
- Consumer Discretionary - Footwear company Caleres (NYSE: CAL) fell 3.2%. Is now the time to buy Caleres? Access our full analysis report here, it’s free.
- Consumer Discretionary - Apparel and Accessories company PVH (NYSE: PVH) fell 4.1%. Is now the time to buy PVH? Access our full analysis report here, it’s free.
- Consumer Discretionary - Apparel and Accessories company Kontoor Brands (NYSE: KTB) fell 4.7%. Is now the time to buy Kontoor Brands? Access our full analysis report here, it’s free.
- Consumer Discretionary - Wireless, Cable and Satellite company Charter (NASDAQ: CHTR) fell 3.1%. Is now the time to buy Charter? Access our full analysis report here, it’s free.
- Consumer Discretionary - Leisure Products company Latham (NASDAQ: SWIM) fell 5.1%. Is now the time to buy Latham? Access our full analysis report here, it’s free.
Zooming In On Latham (SWIM)
Latham’s shares are very volatile and have had 24 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 23 days ago when the stock dropped 2.2% on the news that Bank of America lowered its price target on the stock.
The firm's analyst, Rafe Jadrosich, cut the price target to $6.00 from a previous $7.00, representing a decrease of about 14.3%. While the price objective was reduced, the investment firm maintained its existing rating on the pool manufacturer's shares.
A lower price target can signal to investors that an analyst sees less potential for the stock's value to increase in the near term compared to their prior forecast. This can create concern and put downward pressure on the stock price.
Latham is down 24.9% since the beginning of the year, and at $4.76 per share, it is trading 42.4% below its 52-week high of $8.25 from August 2025. Investors who bought $1,000 worth of Latham’s shares 5 years ago would now be looking at only $160.48.
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