Largely spurred by a sharp rise in the price of oil thanks to OPEC’s sustained production cuts, stocks pushed their way to record highs on Monday. The S&P 500 reached 2,404.05 before peeling back to a close of 2,402.43. That’s the index’s best close ever, and leaves the index within easy reach of a breakout move above 2,404.
Monday wasn’t a winner for all names though. Sears Holdings Corp (NASDAQ:SHLD), Avis Budget Group Inc. (NASDAQ:CAR) and Tesla Inc (NASDAQ:TSLA) did a particularly good job of keeping the brakes on the broad market’s rally effort. Here’s what went wrong for each name.
Tesla Inc (TSLA)
The 2.7% setback Tesla shares suffered on Monday clearly wasn’t a fatal blow — the oft-discussed and highly polarizing company travels that far (up and down) on a pretty regular basis. What was so interesting about the pullback from TSLA was why it materialized, and who did the deed.
Morgan Stanley analyst has generally been bullish on TSLA since he initiated coverage on the electric car maker. This morning, though, he surprised a lot of people by downgrading Tesla shares from “Overweight” to “Equal weight,” explaining bigger players getting into the autonomous and electric vehicle game like Apple Inc. (NASDAQ:AAPL) or Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) could easily chip away at Tesla’s dominance. He noted along with the downgrade:
“We expect much larger and more well capitalized competitors to unveil strategies that directly address sustainable transport and mobility.”
Of course, the fact that TSLA shares were up more than 50% year-to-date as of Friday’s made it a relatively easy profit-taking target.
Avis Budget Group Inc. (CAR)
Shares of car-rental outfit were already in a pretty decisive downtrend, but when CFO David Wyshner announced he was resigning to seek other opportunities, the sellers really turned up the heat on CAR. Wyshner has served as the company Chief Financial Officer since 2006.
Although the company has managed to grow reasonably well through 2014, beginning in 2015 ride-sharing and ride-hailing services like Uber as well as a general slowing in demand for car rentals has crimped the company’s numbers. It doesn’t appear Wyshner’s exit was directly related to that headwind, though most voluntary resignations are deliberately vague.
Already down 31% since the end of 2016 as of Friday, CAR lost another 5.1% today.
Sears Holdings Corp (SHLD)
Last but not least, just a couple of trading days following an interview with its CEO that blamed the media for the retailer’s troubles, Sears Holdings chief Eddie Lampert today publicly chided one of its merchandise suppliers for allegedly trying to get out of its agreement with the company. That supplier was Chinese company One World, which makes power tools for Sears’ Craftsman brand. One World is looking to negate its contract, threatening to file a lawsuit if it’s unable to do so. Lampert effectively threatened legal action if One World didn’t adhere to the deal.
Legal wrangling is neither new nor unusual within the world of business. What is now — and alarming to SHLD investors — is the development of (1) a potential legal battle that the struggling retailer likely can’t afford to get into right now, and (2) how agitated Lampert has been of late.
SHLD ended the day down 12.4%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.