Stocks started Thursday out on a bullish foot, spurred higher by reports that new unemployment claims . With more and more disappointing earnings and forecasts weighing on investors’ minds though, it didn’t take much — or long — for stocks to swing back into bearish mode. The S&P 500 finished the day at 2,102.18, down 0.57%.
And for shareholders of Caterpillar Inc. (NYSE:CAT), Dow Chemical Co (NYSE:DOW) and Freeport-McMoRan Inc. (NYSE:FCX), troubling earnings and outlooks drove those stocks the market’s worst of the worst on Thursday.
Freeport-McMoRan (FCX)
Freeport-McMoRan shareholders likely went into Thursday’s earnings announcement knowing the numbers were going to be ugly. And yet, even though the actual earnings figure was better than expected, something about seeing the disappointing official results prodded an 9% pullback from FCX … the market’s biggest large cap loser for the day.
In its second quarter of 2015, mining company Freeport-McMoRan on $4.25 billion in revenue. The pros were only looking for a profit of 7 cents per share of FCX, though analyst estimates for a top line of $4.28 billion weren’t quite met. Both the top and the bottom lines came up well short of year-ago levels thanks to rather extreme tumbles in commodity prices in the meantime.
The company credits the profits it was able to create — when other miners aren’t able to do the same — on .
Dow Chemical (DOW)
The good news is, Dow Chemical reported second-quarter earnings that were better than expected. The bad news is, that’s the only good news from the Dow earnings report. Sales fell (and fell short of estimates), and the outlook was less than encouraging.
Dow Chemical , well up from the 74 cents the chemical supplier earned in the same quarter a year earlier. The market was looking for a bottom line of 83 cents. Sales, however, fell to $12.91 billion, versus expectations of $13 billion. An adverse currency situation took a big part of that bite out of revenue.
That being said, the bigger hurdle Dow Chemical may be facing now isn’t currency volatility, but rather, a simple lack of demand from an important market — China. , “China remains a mixed bag… very solid Q2 for us is not necessarily a harbinger of Q3.”
DOW was down 4.5% on the news.
Caterpillar (CAT)
Last but not least, while Dow Chemical and Freeport-McMoRan are both cutting costs in an effort to maintain margins, Caterpillar is moving in the other direction. It’s shrugging off Wall Street’s calls for conserving cash, and judging from the near-4% plunge CAT shares suffered on Thursday, investors are none too happy about it.
They may be displeased because there’s no evidence that previous cost-cutting measures are paying off now. Last quarter, profits fell 19%, , while revenue fell 13% on a year-over-year basis.
CEO Doug Oberhelman said during the earnings conference call that deeper cost-cutting could crimp capacity at the key point in time when demand recovers.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
