Encouraging economic news got the bulls going right out of the gate today, and they never looked back. That is, better-than-expected construction spending and an ISM Index reading of 49.5 rather than the expected 48.5 was enough to pump up the S&P 500 by 2.39% to a close of 1,978.35. The bullish moves carried most of the indices above some key resistance levels.
Not every stock was soaring on Tuesday, however. Barrick Gold Corporation (USA) (NYSE:ABX), Barclays PLC (ADR) (NYSE:BCS) and Medtronic PLC (NYSE:MDT) all finished the session alarmingly deep in the red.
Barrick Gold Corporation (USA) (ABX)
At first glance, it would be easy to presume today’s 4% slide from Barrick Gold was a reflection of a dip in gold prices. A closer look at the facts, however, suggests otherwise.
Reality: Gold prices fell a mere 0.19% on Tuesday. The sizable pullback from ABX was oversized relative to the commodity’s lull. Rather, the big stumble was more likely the result of an overheated move over the course of the past month and a half; ABX gained over 70% between Jan. 19 and Monday’s close.
Still, the company is optimistic about the future. Barrick Gold President Kelvin Dushnisky said on Monday:
“We were on the defensive, if you will, in 2015, and we’re moving away from that. We’re not just going to make an acquisition for the sake of doing an acquisition. We’re patient. We’ll see.”
Medtronic PLC (MDT)
Medtronic PLC did well enough last quarter in terms of its bottom line, but a disappointing top line sent MDT shares more than 4% lower on Tuesday. In its third fiscal quarter, medical technology company Medtronic earned $1.06 per share on sales of $6.93 billion. The profit figure was in line with the market’s projection for MDT, but the sales tally fell short of the expected $6.99 billion.
Fanning the bearish flames for MDT on Tuesday were weak margins and a lackluster outlook. Operating margins of 27.8% were a little short of the anticipated 28% to 28.5%. Still, Leerink analyst Danielle Antalffy remains mostly optimistic on Medtronic PLC, saying:
“U.S. sales growth did slow a bit, coming in at 4% growth vs. our 6% projection and representing a deceleration from the 6% growth seen in (fiscal) Q2 2016 and the 14% growth seen in (fiscal) Q1 2016. This slowing growth is likely in large part attributable to increasingly difficult comparables and, to us, doesn’t yet suggest an alarming signal of a broad-based slowdown.”
Barclays PLC (ADR) (BCS)
Last but not least, UK-based bank Barclays PLC lost £394 million last quarter, more than doubling the £174 million loss booked in the fourth quarter of 2014.
In response to the repeat losses, Barclays also informed shareholders it would cut its dividend from 6.5 pence to 3 pence.
Also in an effort to preserve much-needed cash, Barclays announced it would be shedding its 62% stake in its African banking business that’s been struggling.
BCS finished the session down 6%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
