Why Tesla Motors Inc (TSLA), United Technologies Corporation (UTX) and International Business Machines Corp. (IBM) Are 3 of Today’s Worst Stocks

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Another round of disappointing earnings announcements sent stocks tumbling today, though the fact that the market is well overbought made them particularly vulnerable to a pullback. By the time the closing bell rang, the S&P 500 was at 2119.21 , down 0.43% for the session.

Why Tesla Motors Inc. (TSLA), United Technologies Corporation (UTX), International Business Machines Corp. (IBM) Are 3 of Today's Worst StocksBut it was worse — much worse — for anyone invested in International Business Machines Corp. (NYSE:IBM), Tesla Motors Inc (NASDAQ:TSLA) or United Technologies Corporation (NYSE:UTX). These three names led the bearish charge. Here’s why.

United Technologies Corporation (UTX)

Defense contractor United Technologies was the worst-performing large cap stock on Tuesday, bar none. UTX closed 7% lower for the session.

The selloff came on the heels of (very) disappointing second-quarter results. The profit of $1.84 per share of UTX was in line with last year’s total, and trounced the $1.71 per share analysts were expecting. Revenue of $16.3 billion, however, missed estimates for $16.52 billion as well as were well below the year-ago top line of $17.19 billion.

United Technologies poured salt in the wound by lowering its full-year profit outlook from a range of $6.55 to $6.85 per share of UTX to a range between $6.45 and $6.60 per share.

The company said economic weakness in China was a key reason for the disappointing numbers.

International Business Machines Corp. (IBM)

United Technologies was the biggest large cap loser on Tuesday, but International Business Machines was a very close runner up with its 5.8% plunge.

It was once again an earnings report that did the deed. Though the company managed to top earnings estimates of $3.79 per share by posting a profit of $3.84 per share of IBM stock, revenue of $20.81 billion was short of the $20.93 billion analysts were expecting. Both the top line and the bottom line were well below year-ago levels, when IBM earned a profit of $4.43 per share on $24.36 billion worth of sales.

Investors were further spooked by the fact that IBM has now posted weaker year-over-year sales in 13 straight quarters; it can’t seem to stop the bleeding.

Tesla Motors Inc (TSLA)

Last but not least, after reaching multimonth highs on Monday, Tesla Motors shares fell a sizable 5.5% on Tuesday thanks to its third downgrade in a month.

UBS did the deed this time, downgrading TSLA to a sell and simultaneously lowering its price target on the stock from $220 to $210. UBS analyst Colin Langan simply believes the current price of Tesla shares factors in long-term growth that simply won’t be there in the future. He wrote:

“Early adopters (‘green’ consumers) likely are driving up initial orders, but once these orders are filled, making the mass market leap will likely be difficult given the challenging economics.”

Langan also said the company’s energy-storage efforts would yield disappointing results.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/07/tesla-motors-inc-tsla-united-technologies-corporation-utx-international-business-machines-corp-ibm-3-todays-worst-stocks/.

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