In a complete 180-degree turnaround from Monday’s sizable gain, the potential beginning of a currency war with China set U.S. stocks back by more than a little bit. When all was said and done, the S&P 500 closed at 2,084.07 on Tuesday, down 0.96%.
It could have been worse, and for owners of Symantec Corporation (NASDAQ:SYMC), General Motors Company (NYSE:GM) and Freeport-McMoRan Inc. (NYSE:FCX), it was worse. These three names were among the worst of Tuesday’s worst performers. Here’s why.
Freeport-McMoRan Inc (FCX)
If things could have been any worse for Freeport-McMoRan today, it’s tough to imagine how.
The 12%-plus backslide from FCX shares largely started in the shadow of yesterday’s news that the company would be issuing stock to remain solvent through this troubling period of weak commodity prices. Although nobody was under any illusion it was an ideal decision, it was at the very least cheered by FCX investors who were at least confident it was a means of survival.
Now those supporters are having second thoughts, recognizing Freeport-McMoRan is in really, really big trouble.
Those doubts were underscored by another sweeping decline in commodity prices Tuesday. Crude oil was down a hefty 4.2%, and most of the key metals were down as well. Throw in the fact that China’s deliberately devalued yuan is going to make that nation’s exports of metals and oil cheaper and therefore even more competitive with Freeport-McMoRan’s goods, and it’s surprising FCX “only” fell 12.3%.
Symantec Corporation (SYMC)
Despite the good news that Symantec was finally shedding its distracting Veritas unit via a sale to private equity firm The Carlyle Group LP (NASDAQ:CG), investors just couldn’t get past the company’s disappointing first-quarter results.
All told, Symantec earned 40 cents per share on $1.5 billion in revenue last quarter. Analysts, however, were looking for a top line of $1.52 billion and a bottom line profit of 43 cents per share. The current quarter’s guidance wasn’t exactly thrilling either.
One would have thought the prospect of selling its often-incompatible data-storage venture, Veritas, for $8 billion in cash would have soothed disappointed investors who would be glad to see Symantec put its sole focus on the lucrative cybersecurity market. One would have been wrong in thinking that, however. SYMC shares fell nearly 7% on Tuesday.
General Motors Company (GM)
Last but not least, automaker General Motors was on the receiving end of a one-two punch on Tuesday, with the double-barreled blow coming from China sending GM shares 3.5% lower.
First and foremost, though GM may be an iconic American company, it relies heavily on Chinese consumers. So, when reports rolled out today pointing out China’s car sales for July were the lowest they’ve been in more than a year (own 2.5%), the news hit GM first, and hardest.
The knockout punch was news that China lowered the relative value of the yuan, which as was noted about Freeport-McMoRan, will make American products less attractive to Chinese consumers.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
