Spurred by weak construction activity for September and weak auto sales for October, investors decided the glass was half-full on Tuesday, sending the S&P 500 to a close of 2,111.72. Not only was that a loss of 0.68%, it pulled the index under a key support level that had been propping the market up since early September.
It could have been worse, though, and for owners of Tesla Motors Inc (NASDAQ:TSLA), BP plc (ADR) (NYSE:BP) and L Brands Inc (NYSE:LB), it was worse.
Here’s why these three names led the bearish parade today.
L Brands Inc (LB)
It’s not exactly a secret that L Brands — the name behind Victoria’s Secret and Bath & Body Works — has been struggling with a headwind. But, with an encouraging second-quarter report posted in August, it wasn’t a stretch to conclude the worst was behind it. Now, LB owners have good reason to have their doubts again.
After Monday’s close, L Brands warned investors that its third-quarter numbers wouldn’t be as strong as initially presumed, largely on the heels of a sales slowdown. The company said its Q3 bottom line would be right around 40 cents per share, or at the lower end of the previous guidance for a profit of between 40 and 45 cents per share. Analysts were looking for 46 cents.
Fanning the bearish flames that sent LB down 7.9% on Tuesday was a disappointing same-store sales growth figure for October. The company only saw a 1% improvement, versus the market’s expectations for a 1.7% advance.
The shortfall and outlook was enough to prompt a downgrade from Mizuho, which now rates LB as “Neutral” based on severe challenges to be faced in near future. Mizuho lowered its price target on LB from $85 to $70.
BP plc (ADR) (BP)
The good news is that oil giant BP managed to top its earnings estimates for last quarter. The bad news is that those estimates were woefully low, and BP shareholders were hoping for a convincing earnings beat.
In its third quarter of 2016, British oil and gas name BP earned 30 cents per share on sales of $48.04 billion. Analysts were looking for only 25 cents per share. Those same analysts were also calling for a top line of $50.51 billion though. Between the revenue miss and the poor comparison to a year-ago profit of 60 cents per share and sales of $57.3 billion, BP was sent 4% lower for the session.
That being said, BP didn’t exactly put a bullish spin on its numbers our outlook. Concerned that crude prices could remain suppressed for a long while, BP is scaling back on its capital expenditure plans for the remainder of the year, and isn’t feeling especially optimistic about 2017 either.
Tesla Motors Inc (TSLA)
Last but not least, though it jumped on a surprise earnings beat on Thursday of last week, shares of Tesla Motors have been peeling back ever since. Today’s 3.5% dip is the biggest daily loss of the past four sessions, and carried TSLA shares to new multi-week lows.
The prod for the pullback isn’t exactly clear, though it’s reasonably safe to assume the company is still facing a cash-crunch in the near future. Traders were also unimpressed by the company’s plans for solar roofs, unveiled on Friday. The unveiling lacked specifics, and with a recalculated set of numbers that will illustrate what Tesla is apt to look like after a SolarCity Corp (NASDAQ:SCTY) acquisition slated for late Tuesday, TSLA shareholders couldn’t take any chances on another dose of disappointment.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
