In a complete reversal of yesterday’s sharp selloff, the S&P 500 gained 0.37% on Thursday to end the session at 2,365.74. Although one good day isn’t any assurance that Wednesday’s 1.82% rout was a one-off, it does offer a glimmer of hope that stocks aren’t doomed to an outright implosion.
That hope was of little comfort to owners of Endologix, Inc. (NASDAQ:ELGX), Cisco Systems, Inc. (NASDAQ:CSCO) and Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR.A) today, however, with these three names all using far more than their fair share of red ink.
Petroleo Brasileiro SA Petrobras (ADR) (PBR.A)
Talk about being in the wrong place at the wrong time. On Tuesday, shares of Brazilian oil giant were crushed in the wake of a potential scandal that upended all of the country’s stocks. PBR was just the worst of the worst among the major names.
The alleged scandal implicates relatively new President Michel Temer. Allegations surfaced that he supported the bribery of a key witness in a government investigation. Temer denies he committed any crime, but calls for his resignation worried investors that a major disruption of his economic agenda is in the works.
PBR was in good company with its 16.9% setback. Banco Santander Brasil SA (ADR) (NYSE:BSBR) closed 18% lower on Thursday, while Ambev SA (ADR) (NYSE:ABEV) lost 11.7% of its value. The Brazilian stock market index IBOVESPA ended the day down 8.8%.
Cisco Systems, Inc. (CSCO)
Networking giant Cisco Systems reminded us today that earnings season isn’t quite over yet … unfortunately. CSCO shares tumbled 7.2% after the company’s fiscal third-quarter earnings beat was trumped by its dismal fourth-quarter outlook.
For the quarter ending in April, Cisco earned 60 cents per share on revenue of $11.94 billion, topping estimates for a profit of 58 cents per share and sales of $11.9 billion.
The router maker has doubts about its near-term future, however. Cisco also reported with its Q3 numbers that for Q4, it’s only expecting a profit of 61 cents per share on revenue of $12 billion. Not only would both be lower on a year-over-year basis, both are lower than figures analysts had modeled. The pros were calling for a bottom line of 62 cents per share of CSCO and a top line of $12.5 billion.
Endologix, Inc. (ELGX)
Finally, medical device maker Endologix told investors exactly what they didn’t want to hear after Wednesday’s close, and paid the price for it on Thursday. The company’s endovascular aneurysm sealing system, called Nelix, is going to take longer than first thought to get the Food and Drug Administration’s green light.
Endologix was given the bad news following a recent meeting with the Food and Drug Administration, which was intended to better define the device’s approval pathway. The agency had decided, however, that it needs to see all the data from a confirmatory trial that’s currently underway, rather than approve it before the trial’s data is on hand. That delay pushes any approval back to 2020.
ELGX fell 36.7% on the news.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
