Wall Street to Toy Makers: Get the Lead Out

How much will Mattel's big recall affect its business – and its stock?

Toy makers had little to laugh about on Aug. 2, even as a jumpy Wall Street managed a convincing rally overall. After the market closed on Aug. 1, Mattel issued a recall of nearly one million toys in the U.S. and another half-million in overseas markets. The company found potentially high levels of lead paint in the products, made in China.

Recalls are common among toy makers, but this one affected some marquee brands -- the popular Elmo, Dora the Explorer and Diego characters. It comes at a time when consumers are already leery of Chinese products. Bargain hunters initially pushed Mattel's stock (symbol MAT) higher, but by mid-morning it changed course and the stock closed at $23.18, down 1.7%.

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Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.