In spite of a lackluster jobs-growth report for May, the bulls went to work early on Friday and didn’t clock out until the closing bell rang. When all was said and done, the S&P 500 closed up 0.37% to end the day at 2,439.07, touching new record highs in the process.
Not every name got on board the bullish train though. RH (NYSE:RH), Pinnacle Foods Inc (NYSE:PF) and Marathon Oil Corporation (NYSE:MRO), for instance, were all headed in the other direction in a pretty big way.
Here’s a closer look at what went wrong for each.
Marathon Oil Corporation (MRO)
Technically speaking, Marathon Oil wasn’t Friday’s biggest loser. That (dis)honor belongs to Canadian oil driller Cenovus Energy Inc (USA) (NYSE:CVE) actually led the charge lower with its 5.4% setback, and Devon Energy Corp (NYSE:DVN) wasn’t far behind with a loss of 3.3%. In terms of total market cap lost and volume though, the 2.9% dip MRO took today did the most net damage.
The root cause in all cases was the same. That is, investors are fearful that oil prices could continue to fall now that the United States has backed out of the Paris Climate Accord. With what is effectively a green light to “drill, baby, drill,” investors are concerned the same supply glut that upended MRO and most other oil stocks in 2015 could surface again.
This week’s loss for crude was the biggest weekly loss in a month.
Pinnacle Foods Inc (PF)
Friday’s big losers certainly weren’t limited to the energy sector, however. Pinnacle Foods was waist-deep in the bearish mix after news broke that a potential merger with rival food company Conagra Brands Inc (NYSE:CAG) wasn’t likely to happen.
The two outfits have been talking off and on for weeks now about a tie-up that would create a frozen food behemoth should such a deal be consummated. But, the suitor — Conagra — and Pinnacle reportedly couldn’t agree on a price.
A pairing of the two companies would be a win-win. Pinnacle Foods lacks the size and scale it needs to fully compete with bigger names in the business, and some say Conagra is under-levered and needs a new growth avenue. CEO Sean Connolly doesn’t want that growth for the wrong price though, which could have cost him in the neighborhood of $77 per share of PF.
Pinnacle shares ended the day down 6%.
Finally, add home furnishings retailer RH (the company formerly known as Restoration Hardware Holdings) to your already lengthy list of retailers that botched the first quarter.
For the three month period ending in April, RH earned a profit of 5 cents per share on sales of $562.1 million. The bottom line met estimates, and the top line exceeded estimates of $556 million. The prod for the whopping 25.7% tumble from RH shares was its lowered guidance for the full year.
Throughout 2016 and particularly in the last quarter of last year the company firmly implied its headwind was a temporary matter. After lowering its 2017 profit outlook from a range of between $1.78 and $2.19 to a range of between $1.67 and $1.94 though, it’s difficult for RH shareholders to trust the company knows how to get back on a growth track.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.