What Happened?
A number of stocks fell in the afternoon session after a report from The Conference Board showed its Consumer Confidence Index fell for a second consecutive month to 94.2, its lowest level since April 2025.
The decline was driven by a more pessimistic view of current conditions, with the Present Situation Index falling by 7.0 points. Consumers' assessments of both business conditions and job availability weakened significantly, with the latter falling for the ninth straight month to a multiyear low. This drop in confidence is a concerning signal for the economy, as it often precedes a slowdown in consumer and business spending. For the business services sector, which is sensitive to economic cycles, weakening confidence can translate into reduced demand for a wide range of 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:
- Digital Media & Content Platforms company IAC (NASDAQ: IAC) fell 3.6%. Is now the time to buy IAC? Access our full analysis report here, it’s free.
- Safety & Security Services company GEO Group (NYSE: GEO) fell 3.6%. Is now the time to buy GEO Group? Access our full analysis report here, it’s free.
Zooming In On IAC (IAC)
IAC’s shares are somewhat volatile and have had 13 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 biggest move we wrote about over the last year was about 2 months ago when the stock dropped 13.5% on the news that the company reported second-quarter revenue that fell short of analyst expectations, overshadowing a significant profit.
The media and internet company’s revenue landed at $586.9 million, a 7% drop from the year-ago period. This decline stemmed from weakness in several key areas. The Search segment’s revenue plummeted 39%, while the Care.com unit saw a 6% decrease. Although IAC recorded a profit of $2.57 per share, a stark reversal from last year's loss, this figure included a large unrealized gain from its investment in MGM Resorts International. Investors appeared to focus on the operational weakness rather than the investment-driven profit.
IAC is down 20% since the beginning of the year, and at $34.07 per share, it is trading 38.2% below its 52-week high of $55.10 from November 2024. Investors who bought $1,000 worth of IAC’s shares 5 years ago would now be looking at an investment worth $284.44.
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