With the Federal Reserve standing ready to deliver its updated thoughts n the economy — and perhaps even a rate hike — investors were content to mostly sit on their hands on Tuesday. The S&P 500 ended the session at 2391.96, up a mere 0.12%.
Not every name dished out modest movement on Tuesday though. Archer Daniels Midland Company (NYSE:ADM), Ford Motor Company (NYSE:F) and Advanced Micro Devices, Inc. (NASDAQ:AMD) were all sent careening following the release of alarming news. Here’s what investors need to know about each setback.
Advanced Micro Devices, Inc. (AMD)
In the grand scheme of things, the earnings report computer hardware company Advanced Micro Devices posted after Monday’s close wasn’t horrible. Analysts were expecting a loss of only four cents per share, and though AMD lost eight cents per share, being a turnaround story makes it a tough company to handicap.
Besides, revenue of $984 million was right in line with estimates, and both earnings as well as sales were up on a year-over-year basis.
In the shadow of the 250% rally AMD shares had mustered over the course of the 12 months leading up to Monday’s announcement though, the market was clearly expecting perfection, and then some. When they didn’t get it, they sent AMD shares crashing. The stock ended the day down a whopping 24.4%.
Ford Motor Company (F)
AMD wasn’t the only big name to get hammered on Monday in response to a disappointing news. Ford Motor Company’s engine stalled during April, sending F shares off by 4.4%.
Last month, Ford sold 213,436 automobiles in the U.S. That was 7.1% less than it sold in the same quarter a year earlier, and 4.7% less than analysts had projected.
It wasn’t just Ford Motor that hit a speedbump in April either. Rival General Motors Company (NYSE:GM), which had mostly withstood the industrywide headwind, couldn’t keep things up last month. Its sales were lower by 5.8% on a year-over-year basis, falling short of estimates by 2%. It was also the fourth month in a row U.S. auto sales had ceded.
Ford struggled more than GM did largely because it’s more interested in maintaining palatable margins than it is in winning market share. Its average transaction price was up by about $1900, suggesting it wasn’t interested essentially giving cars away for little more than their cost. It’s an either/or decision, however, that auto manufacturers haven’t been forced to make until recently, giving new credence to the notion that “peak auto” is in the rear-view mirror.
Archer Daniels Midland Company (ADM)
Last but not least, food company Archer Daniels Midland fell short of its first quarter earnings and sales estimates.
For the quarter ending in March, ADM turned $14.99 billion worth of revenue into a profit of 60 cents per share. Analysts, however, were looking for a bottom line of 61 cents per share of ADM and a top line of $15.28 billion. Both were up on a year-over-year basis, but that wasn’t enough to diffuse the alarming message Archer Daniels Midland delivered to shareholders along with its Q1 report.
The company also cautioned that high levels of stored grain all over the world are making the business of grain storage and sales less profitable.
ADM closed 8.9% lower for the session.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.