For a while it looked like stocks might recover the bulk of the steep China-induced losses suffered right out of the gate this morning. But, by mid-day, the bounce effort was already fading. By the end of the day, the S&P 500 was in the red to the tune of 3.9%, closing at 1,893.21.
And for shareholders of Cabot Oil & Gas Corporation (NYSE:COG), Xerox Corp. (NYSE:XRX) and Citrix Systems, Inc. (NASDAQ:CTXS), it was much, much worse. Here’s why these three names were outright train wrecks today.
Cabot Oil & Gas (COG)
It’s difficult to distinguish between what kind of damage the marketwide bearish tide inflicted on specific stocks today, and how much of any particular pullback was attributable to company-specific trouble. But, in that Cabot Oil & Gas was the worst-performing large cap of the day — with a 9.8% tumble — it’s not unreasonable to assume COG was more than just an unfortunate victim unlucky timing.
The prod for the pullback from COG was, of course, another miserable day for oil and natural gas prices. Crude futures fell another 4%, pulling oil down to well below $40 per barrel … the lowest price for oil seen in the past six-and-a-half years.
Ditto for natural gas, which arguably has an even bigger impact on Cabot Oil & Gas than the price of crude oil does. Natural gas futures were off more than a full percentage point on Monday for the same China-based reason oil futures tumbled.
Citrix Systems (CTXS)
Though COG was the biggest loser among major U.S. stocks, there were plenty not too far behind. Running a close second among bearish names today was Citrix Systems, which lost 8.8% of its value in today’s trading.
The setback may have been spurred by some bearish comments from Dragonfly Capital Management founder and president Gregory Harmon. In his post “Citrix schedules a meeting for more downside,” he pointed out four different trades that centered around CTXS, each of which assumed that the stock would be lower in the foreseeable future.
With the seed planted in their heads at the right time in the right way, traders took the ball and ran with it.
Xerox (XRX)
Last but not least, Xerox shares fell 7.1% on Wednesday, mostly in response to news of an acquisition.
Long story made short, Xerox is acquiring RSA Medical, for the stated purpose of giving the company more exposure to the healthcare arena.
RSA Medical is a privately held company, and the terms of the deal weren’t disclosed. With sales and income waning though, and cash flow looking a little thin at times in recent quarters, the steep slide from XRX suggests this isn’t a fix the market is particularly thrilled with. Rather, XRX shareholders quietly understand the move is a somewhat desperate effort from the company to beef up its top line that has been slowly fading.
The market environment, of course, certainly didn’t do Xerox any favors either.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
