The bulls managed to get a little traction on Thursday, perhaps spurred by better-than-expected factory orders for February and lower-than-expected unemployment claims for last week.
But, the S&P 500’s 0.35% gain and close of 2,066.96 still wasn’t enough to send a convincing bullish massage to investors waiting on the sidelines to see how all this recent volatility is going to play out.
In the meantime, plenty of stocks continue to lose more than a little ground. Take Valero Energy Corporation (NYSE:VLO), NuVasive, Inc. (NASDAQ:NUVA) and Motorola Solutions Inc. (NYSE:MSI) for instance. Each of these names dipped deep into the red ink today. Here’s why.
NuVasive Chief Executive Officer Alex Lukianov is now former NuVasive Chief Executive Officer. Lukianov abruptly resigned Wednesday evening after an independent investigation had determined he hadn’t adhered to the company’s expense reimbursement policies.
Details of the probe were scant, though NUVA shareholders can draw some broad conclusions based on director Jack R. Blair’s comment explaining that Lukianov’s actions “in this regard were not representative of the high standards by which NuVasive operates.”
Though likely the proper thing to do for all affected parties, it’s still a disruption current NuVasive investors didn’t want to see. Lukianov had largely led the company through its infancy to the $2 billion enterprise it has become since he took the helm in 1999.
NUVA shares fell more than 7% on the news of Lukianov’s departure
Motorola Solutions (NYSE:MSI)
Most Motorola Solutions shareholders and observers tacitly knew this was a problem. Still, seeing it confirmed in writing was enough to send MSI down more than a little bit on the last day of the shortened trading week.
That problem? Motorola Solutions would like to sell itself, but after looking for months to find a willing suitor, the company hasn’t been able to generate any acquisition interest.
It’s a concern for MSI shareholders, who are starting to think if a much bigger technology company or even a rival doesn’t see any real value in buying Motorola Solutions (in what would be an easy and inexpensive deal to make), then maybe MSI isn’t worth holding as an investment either.
Whatever the case, MSI shares fell more than 6% on the news.
Valero Energy (NYSE:VLO)
Just for the record, most oil stocks were deep in the red today, all for the same reason. It was Valero Energy out in front though, leading the charge lower.
The near-6% collapse in the price of VLO shares was the result of a 3.6% slide in the price of oil. Crude pulled back to close at a price near $48.30 per barrel.
The price of oil, however, fell sharply because of yet another record-breaking amount of stockpiled crude oil. As of the end of last week, the Energy Information Administration says the United States is sitting on 471.4 million barrels of oil. For perspective on the current runup in stockpiled crude, the previous swell in the second quarter of 2014 peaked at around 400 million barrels, and that was considered an unwieldy amount.
With more and more (indeed, too much) oil on our hands, Valero Energy has little to offer consumers. Likewise, VLO has little to offer investors until the glut has dissipated. That could take months, though.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.