What Happened?
Shares of gaming, betting and entertainment company Bally's Corporation (NYSE: BALY) jumped 15% in the morning session after it rebounded from a significant sell-off the previous week that was driven by broader economic concerns.
The stock is recovering after falling 7.6% last week, which extended its year-to-date losses to almost 50%. The bulk of the losses occurred amid a broad-based market sell-off following a weak August jobs report. In the absence of any new company-specific news to explain the rally, the upward movement appears to be a technical rebound as investors might be buying the dip. The company has been contending with several issues and recently posted a loss in the second quarter, even as its revenues surpassed estimates.
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What Is The Market Telling Us
Bally’s shares are extremely volatile and have had 52 moves greater than 5% over the last year. But moves this big are rare even for Bally's and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 3.2% on the news that a surprisingly weak August jobs report fueled concerns of a cooling economy but also raised expectations for Federal Reserve interest rate cuts.
The U.S. economy added a mere 22,000 jobs last month, a significant miss from the 75,000 analysts had projected, according to the Bureau of Labor Statistics. This figure represents a notable slowdown in the labor market. While such a sharp decline in job growth can be a bearish signal for the economy, investors are now betting it will force the Federal Reserve's hand. As noted by one economist, the market's initial reaction seems to be more focused on the increased likelihood of Fed rate cuts rather than the immediate concerns about economic cooling, with a September cut now seen as fully priced in.
Bally's is down 48.5% since the beginning of the year, and at $10.01 per share, it is trading 54.6% below its 52-week high of $22.07 from November 2024.
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