Wednesday wasn’t just a bullish day for the market, but a memorable one. Today was the first time the Dow Jones Industrial Average moved above the pivotal 20,000 level, and better still, it remained there through the close. The Dow finished the session at 20,068.51, up 0.78%.
Textron Inc. (TXT)
Defense contractor Textron ran into handful of headwinds on Wednesday, sending TXT to an eye-popping loss of 5.4%.
Chief among the reasons for the setback was last quarter’s numbers. The name behind Bell helicopters and Cessna airplanes earned 80 cents per share on revenue of $3.82 billion, but analysts were collectively expecting a profit of 87 cents per share of TXT and a top line of $4.01 billion. Things aren’t expected to improve anytime soon either. For fiscal 2017, Textron foresees posting a profit of between $2.50 and $2.70 per share of TXT, versus the market’s estimate of $2.92.
In light of the struggle with its existing businesses, the decision to further complicate things by acquiring Arctic Cat Inc (NASDAQ:ACAT) seems ill-advised. Not only do TXT shareholders feel Textron should fix what’s broken, they’re concerned the 41% premium paid for ACAT shares may be an unnecessarily high price.
Freeport-McMoRan Inc (FCX)
Textron wasn’t the only name to be up-ended by a disappointing quarterly report on Wednesday. Mining outfit Freeport-McMoRan also posted lackluster fourth-quarter numbers, and shareholders paid the price, with FCX falling 3.1%.
For the quarter ending in December, the mining outfit earned 25 cents per share on $4.38 billion in revenue. The top line was better than estimates for $4.08 billion, but the bottom line fell short of the expected 32 cents per share of FCX.
Weak sales of copper produced by its Indonesian mine were a key part of the culprit behind the shortcoming. For 2016, Freeport had previously lowered its production expectation to 1.24 million ounces of gold and 1.2 billion pounds of copper. When the final full-year tally was taken though, Freeport-McMoRan’s Indonesian site only sold 1.05 billion pounds of gold and 1.05 million ounces of copper.
State Street Corp (STT)
Last but not least, State Street shareholders can thank JPMorgan Chase & Co. (NYSE:JPM) for the 3.4% tumble STT took today … right after they’re done thanking asset manager BlackRock.
BlackRock, the world’s largest investment management firm (as measured by assets) is moving $1 trillion in holdings currently in the custody of State Street over to broker JPMorgan Chase. BlackRock explained it will incur lower fees with the new custodian. Custodians are largely paid based on the dollar value of assets held in manager’s accounts, so the loss of $1 trillion worth of fee-driving assets will be noticeable. State Street had $28.8 trillion collectively held in accounts before the announcement was made.
STT shares ended the session 3.4% lower.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.