Why Vale SA (ADR) (VALE), Vipshop Holdings Ltd – ADR (VIPS) and Esterline Technologies Corporation (ESL) Are 3 of Today’s Worst Stocks

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A little shocked by an unexpectedly low unemployment rate of 5.1% and subsequently confused by only 173,000 new jobs created in August, traders were content to clean out their portfolios as much as possible in front of the three-day weekend. The S&P 500 finished the day down 1.53%, closing at 1921.22. That was 3.4% lower than where the index closed a week ago.

Why Vale SA (VALE), Esterline Technologies Corporation (ESL) and Vipshop Holdings Ltd (VIPS) Are 3 of Today's Worst StocksIt could have been worse, though, and for owners of Esterline Technologies Corporation (NYSE:ESL), Vale SA (ADR) (NYSE:VALE) and Vipshop Holdings Ltd – ADR (NYSE:VIPS), it was worse. Here’s how and why these three names led today’s bearish charge.

Vipshop Holdings (VIPS)

Friday was tough on all stocks, but particularly bearish for some of the market’s more notable Chinese stocks. Alibaba Group Holding Ltd (NYSE:BABA) fell nearly 4%, while JD.Com Inc(ADR) (NASDAQ:JD) stumbled 6.5%. Shares of Vipshop Holdings, however, lost the most ground among the major Chinese names, with VIPS losing 7.5% of its value on the last day of the trading week.

In an unusual break from the recent norm, it wasn’t news from or about China’s stock market that sent BABA, VIPS and JD sharply lower on Friday. Chinese stocks, in fact, aren’t even trading right now, as the nation’s equity market closed on Thursday and Friday to commemorate the 70th anniversary of the end of World War II.

But, in that Chinese stocks take their cue from U.S. stocks and U.S. stocks tanked today on the heels of a mixed employment report for August, Chinese equities followed suit — in spades.

Vale SA (VALE)

VIPS wasn’t the only stock to be caught in the wrong place at the wrong time today. Brazilian iron ore company Vale saw its stock fall nearly 5% on Friday following a double dose of concerning news.

The first punch of the one-two combination was yet another day of declining commodity prices. Although iron ore prices are up slightly since early July, they remain near multi-year lows, and Friday was another loser for commodities as a whole.

The knockout punch for VALE, though, most likely was an extension of the assumption that an already weakened Brazilian economy was still getting worse, as evidenced by the biggest weekly drop its currency has seen in months.

A weak real allows foreign customers to buy more product from Vale SA, but on balance, the company would be better served by a better-balanced currency and a stronger economy.

Esterline Technologies (ESL)

Last but not least, Esterline Technologies reported disappointing fiscal third-quarter numbers after the close on Thursday, and ESL shares paid the price for it on Friday.

Last quarter, the aerospace and defense contractor earned $1.33 per share on revenue of $496.2 million. Analysts, however, were calling for earnings of $1.47 per share of ESL on $531.4 million in sales.

The big driver for the 6% selloff from ESL today, however, was most likely the lowered price target. Though it didn’t alter its current “neutral” opinion of the company, on Friday, Credit Suisse lowered its target price for ESL from $95 to $93 while simultaneously lowering its 2016 and 2017 earnings estimates for Esterline Technologies.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/09/vale-sa-vale-esterline-technologies-corporation-esl-vipshop-holdings-ltd-vips-3-todays-worst-stocks/.

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