Although they got off to a slow start despite Monday morning’s news that January’s durable goods orders were up 1.8%, it didn’t take long for the bulls to find their footing. The S&P 500 gained another 0.10% today, ending the session at 2,369.73. It and the Dow Jones Industrial Average both hit record highs, and both finished the session at record high closes.
Here’s what went wrong for each one.
Tesla Inc (TSLA)
For the second time in three days, electric vehicle maker and (now) solar power player Tesla has earned a spot on the daily ‘Worst 3’ list; today’s setback was ultimately rooted in the same reason TSLA stock tumbled so much on Thursday of last week.
Goldman Sachs did the damage, downgrading TSLA from “Neutral” to “Sell” on concerns that the company simply has too many headaches to handle right now. Analyst David Tamberrino explained:
“While we believe Tesla currently has a lead relative to OEM (original equipment manufacturer) peers with respect to vehicle technology adoption, electric vehicle architecture, and (potentially) battery scale, our concerns are more near-term oriented with respect to operational execution on the Model 3 launch, an unproven solar business, and cash needs.”
TSLA ended the day down to the tune of 4.2%.
ServiceNow Inc (NOW)
Shareholders of cloud-computing outfit ServiceNow were thrown something of an unexpected curveball on Monday, and with the stock already in a modest lull, NOW was easy to send 4.4% lower today.
The curveball was news that Frank Slootman, CEO and Chairman of the Board, would be stepping down as the company’s top executive. His replacement, John Donahoe, is seasoned enough in the tech industry to take the reins and do well. Donahoe is the former chief of online auction website eBay Inc (NASDAQ:EBAY), which is where it is today partly in thanks to his guidance. Observers aren’t so sure now is the best time to make such a transition, however. As BMO Capital Markets analyst Keith Bachman put it:
“We are not thrilled to see Mr. Slootman moving to the chairman role. In our view, Slootman has been the key architect, or at least a key architect, in ServiceNow’s strategy of moving into new good growth opportunities beyond ITSM.”
AmTrust Financial Services Inc (AFSI)
Last but not least, property insurer AmTrust Financial Services failed to live up to its fourth-quarter expectations, sending the stock sharply lower as a result.
For the quarter ending in December, AmTrust Financial reported a profit of only 38 cents per share of AFSI, falling well short of the 73 cents per share analysts were expecting. Sales of $1.42 billion were just a hair better than the expected $1.41 billion, but that modest beat meant little in light of the big earnings miss.
The stock had made respectable, even if not red hot, progress over the course of the last twelve months, advancing 10% over that timeframe. That rally made AFSI just that much more vulnerable though, as it fell 19.2% on Monday.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.