It happened during a day when at least shares of 96% of the companies that were part of the S&P 500 were red.
On that same day, Wynn Resorts was rallying after revealing the preliminary results of their fourth-quarter. It showed results in two places: growth in Las Vegas and earnings in Macau. These results were modestly above consensus estimates.
An article published in Financial Times stated that "the shares in Las Vegas-based Wynn jumped more than 13 percent to $58.36 by the close after the company said it expected revenues in a range of $387m to $395m, compared with $376.8m in the year-ago period. At the close they were flat at $51.50." The article further stated that the "adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) were expected to rise to between $123m and $131m, compared with $111.2m a year ago and ahead of forecasts."
However, the company also announced that the revenues and earnings in Macau are foreseen to decline from last year. There are several factors that contributed to this scenario, including a slowdown in the Chinese economy and the Macau's crackdown on corruption. According to the company, the adjusted "ebitda" in their Macau gaming center is expected to be in the range of $156m to $164m, down from $241.2m in the year-ago period. "Given the high short interest in Wynn Resorts, this pre-release should lead to a sharp short covering rally, which recently has led to swings of 10 per cent or more," said Harry Curtis, an analyst at Nomura.
However, he said that investors should wait to "understand the sustainability of the strength in December in Macau" before jumping in.
To provide a bigger picture, it has been reported that the S&P 500 had dropped about 2.1 percent to 1,880.14, the Dow Jones Industrial Average feel around 2.3 per cent to 15,985.96 and the Nasdaq Composite was short 2.74 percent to 4,488.02.
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