What to watch

Earnings misses get punished by Wall Street

Don’t tell Macy’s or Snap shareholders how great the firstquarter earnings season is. They don’t want to hear it. Sure, overall profits for the Standard & Poor’s 500 stock index are on pace to grow nearly 15% in the January-March quarter — the best numbers since the third quarter of 2011, earningstracker Thomson Reuters says.

The problem is that’s the average. And it masks the pain suffered by investors who own stock in companies that post earnings results that are worse than Wall Street was expecting.

Big misses, it turns out, can add up to big losses for individual names even in a stellar earnings season like the current one.

That point was driven home Thursday when department store retailer Macy’s suffered a stock decline of 17% to $24.35, its lowest close since August 2011.

The retailer, which has been under assault due to the changing shopping habits of Americans who buy more and more products online, reported first-quarter earnings of 24 cents per share, well below the 36 cents analysts’ had forecast.

Snap, one of the new entrants to the social media stock fraternity that includes Facebook, saw its shares get whacked by nearly 22% after Wall Street gave a thumbs down to its weak user growth and weaker-than expected revenue.

The free fall in these two names Thursday is a reminder that even in an up market, some stocks can fall hard.