Why Discover Financial Services (DFS) Went Down On Monday?

We recently published a list of 10 Stocks Defy Monday’s Market Optimism. In this article, we are going to take a look at where Discover Financial Services (NYSE:DFS) stands against other stocks that defy Monday’s market optimism.

US shares kicked off Monday’s trading with a bounceback from last week’s pessimistic sentiment, as economies took a pause from their tariff war.

Additionally, investors breathed a sigh of relief on the February retail sales report which came in not as bad as feared.

According to the latest figures, retail sales rose 0.2 percent, albeit below the 0.6 percent as expected by analysts. Excluding autos, sales are up by 0.3 percent, in line with economists’ expectations.

Following the news, the Dow Jones clocked in a 0.85-percent gain, followed by the S&P 500 with 0.64 percent, and the tech-heavy Nasdaq with 0.31 percent.

Meanwhile, 10 companies bucked a wider optimistic sentiment over a flurry of negative corporate news that weighed down on their shares. In this article, we have listed Monday’s 10 worst performers and detailed the reasons behind their drop.

To come up with the list, we considered only the stocks with $2 billion market capitalization and $5 million in trading volume.

A business professional in a suit swiping their credit card at the store.

Discover Financial Services (NYSE:DFS)

Discover Financial lost 6.86 percent of its value on Monday to end at $152.99 each as investors sold off over concerns that its potential merger with Capital One might not push through.

According to a report by The Capital Forum, the Department of Justice was said to have found the COF’s $35.3-billion acquisition of DFS as “anticompetitive” in the subprime sector.

COF and DFS secured their shareholders’ approval of the merger last month, and the transaction was expected to be closed early this year, subject to customary closing conditions, including the approval of the Federal Reserve and the Office of the Comptroller of the Currency.

Meanwhile, the Delaware State Bank Commission gave its green light for the proposed acquisition in December.

Overall, DFS ranks 2nd on our list of stocks that defy Monday’s market optimism. While we acknowledge the potential of DFS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as DFS but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.