Through Tuesday’s close, traders had good reason to believe the market remained on reasonably firm footing. Although it is down from its early March peak, the S&P 500 was holding above some key technical support. As of today though, most of that support has been obliterated, opening the door to a wave of profit-taking. The S&P 500’s close of 2,344.93 was 0.38% lower than Tuesday’s last trade, and it left the index knocking on the door of a new multi-week low.
It could have been worse though — you could have owned Qualcomm, Inc. (NASDAQ:QCOM), ArcelorMittal SA (ADR) (NYSE:MT) and Fastenal Company (NASDAQ:FAST). These three picks were among the biggest losers on Wednesday, for understandable reasons.
Fastenal Company (FAST)
Alhough it’s not officially underway, the first quarter’s earnings season is unofficially underway now … unfortunately for Fastenal Company shareholders. FAST shares fell 8.0% on Wednesday despite meeting its Q1 earnings estimates, and topping its first-quarter revenue estimates.
For the quarter ending in March, the company earned 46 cents per share on sales of $1.05 billion. The bottom line was in line with expectations, and the top line was a hair better than the anticipated $1.03 billion. Fastenal earned 44 cents per share of FAST on revenue of $986.7 million in the same quarter a year earlier.
Investors were expecting more and better though, having tacitly priced in a beat on the earnings front, and a better beat in terms of sales.
ArcelorMittal SA (ADR) (MT)
Wednesday was miserable for all metals and mining stocks. Vale SA (ADR) (NYSE:VALE) was off by 4.5%, and Rio Tinto plc (ADR) (NYSE:RIO) was off to the tune of 5.2%. It was Luxembourg’s ArcelorMittal, however, that served up the most misery in terms of total market cap lost today, with its 6.8% setback.
None of these companies did anything wrong. Rather, traders suddenly became very concerned that Chinese demand for metals was going to dry up, that demand for materials in the United States was never going to meaningfully materialize as Trump’s infrastructure agenda continues to hit headwinds.
The big red flag from China was the nation’s inflation report for March, posted today. For the first time since late last year it slumped, with significant weakness in the prices of iron and coal.
Qualcomm, Inc. (QCOM)
Finally, after a long and heated legal battle with smartphone company BlackBerry Ltd (NASDAQ:BBRY), an arbitrator finally declared a winner … BlackBerry. Qualcomm owes BlackBerry $815 million for what ultimately amounts to overcharging the Canadian Technology company for use of QCOM’s technology. The arbitration decision can not be appealed.
The matter may not be over for Qualcomm either. It’s in the midst of a similar legal battle with iPhone maker Apple Inc. (NASDAQ:AAPL). While QCOM says the loss to BlackBerry has no bearing on its beef with Apple, not every impartial observer agrees.
QCOM ended the day down 3.5%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.