Stocks certainly bounced back on Tuesday following Monday’s rout, partially fueled by chatter that any rate hike has now been postponed even if Greece’s fiscal future remains unclear. By the time the closing bell rang, the S&P 500 had gained 0.26%, to finish the session at 2,063.12.
It wasn’t sunshine and roses for all stocks though. Teck Resources Ltd (NYSE:TCK), Sony Corp. (NYSE:SNE) and SYSCO Corporation (NYSE:SYY) each found a way to lose ground despite the marketwide bullish tide. Here’s why.
SYSCO Corporation (SYY)
Remember all the buzz about the fact that SYSCO Corporation was working towards an acquisition of U.S. Foods? Never mind. It’s not going to happen now.
SYSCO has dropped the idea altogether after a Federal judge recently ruled against the plans as they were initially written. And the market is none too happy about it, either. SYY shares fell more than 3% on the heels of the announcement.
SYSCO Corporation could have appealed the decision. But, SYY CEO Bill DeLaney decided it wasn’t worth the effort, and instead the food supplier will look to other, smaller deals that aren’t as likely to raise non-competitive red flags.
That tactic will work to grow SYSCO, though SYY investors are understandably concerned that approach will cost more, take longer, and be more complicated.
Sony (SNE)
The good news: Sony (SNE) is getting deeper into the image sensor business. The bad news: It’s asking the market for the funds to move forward on the sensor front, and diluting existing SNE shareholders to raise that money.
The new venture is part of an ongoing turnaround for Sony, and few investors would disagree that it’s the best opportunity for the company to keep digging its way out of a rut. Televisions and smartphones have been tough since they’ve largely been commoditized. The SNE stock sale aimed at raising $2.6 billion on top of the sale of $1 billion worth of debt, though, was still a surprise to most investors, spurring a 6.5% selloff on Tuesday.
That being said, an investment in the company’s image sensor business may not be a bad bet. Its technology is already the preferred choice among top-tier consumer technology names like Apple and Samsung; Sony owns 40% of that market. It could own more of that market, were it not being held back by limited manufacturing capacity.
Teck Resources (TCK)
Teck Resources just can’t catch a break.
The last five weeks have been miserable for TCK stockholders. Just when it looked like shares might break out of a rut, on May 26 Teck Resources announced it was shuttering six coal mined in Canada due to tepid demand.
In mid-May we learned Chilean regulators were mulling sanctions for one of Teck Resources’ copper mines. Then, just last week the miner suspended copper cathode production in Quebrada Blanca (Chile) after ground movement at a mine was detected.
Already struggling operationally as well as fiscally, Moody’s poured salt in the wound by downgrading $8 billion worth of Teck Resources debt to a negative rating.
The ensuing 4% dip from TCK took the stock well into new 52-week-low territory.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
