Yahoo Finance Why Arconic, General Electric, and Eldorado Gold Slumped Today
Wall Street suffered a downbeat day on Monday, and investors sent major benchmarks lower in response to nervousness about the future for the stock market. Industry giant Goldman Sachs, whose analysts predicted today that the long expansion could fall prey to a global slowdown in the near future, introduced some uncertainty among investors. Even though most of the broader indexes finished down by less than 1%, some individual stocks took much larger hits due to company-specific news that adversely affected them. Arconic (NYSE: ARNC), General Electric (NYSE: GE), and Eldorado Gold (NYSE: EGO) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Arconic makes a change
Shares of Arconic dropped 10% after the aluminum producer reported its third-quarter financial results and made a leadership change. Revenue for the specialty metal products manufacturer was up 3%, with strength in the engineer products and solutions segment as well as the transportation and construction solutions business. Yet declines in the global rolled products segment hurt Arconic, and interim CEO David Hess said that a spike in aluminum prices forced Arconic to incur a large one-time charge. Arconic also said that it had named former General Electric executive Charles Blankenship as its new CEO, scheduled to join the company in January. Given past challenges that Arconic has faced, Blankenship will have a tough job in both helping the business recover and balancing the demands of activist investors from Elliott Management.
Image source: Arconic.
GE gets another vote of no confidence
General Electric shares helped lead the Dow Jones Industrials lower, falling another 6% after a stock analyst company downgraded shares of the conglomerate. Analysts at Morgan Stanley changed their rating from equal weight to underweight and reduced their target price on the stock by $3 to $22 per share. They also believe that GE will cut its dividend, which would mark the second time in less than a decade that the former Dividend Aristocrat will have punished dividend investors. At this rate, some believe that the conglomerate won't be in the Dow much longer, and General Electric will have to work hard to find new opportunities in areas like healthcare in order to regain investors' confidence.
Eldorado looks less than golden
Finally, Eldorado Gold stock finished down more than 28%. The gold mining company gave investors bad news on its Kisladag mine in Turkey, saying that it now believes that the mine will not come close to producing as much gold as initially expected. In particular, new production expectations for 2017 are for 170,000 to 180,000 gold ounces, down from as much as 230,000 to 245,000 ounces earlier in the year. Moreover, with cash costs expected to come in higher than previously anticipated, Eldorado won't be as profitable on its more limited production. That combination comes as bad news for investors who were hoping that Kisladag would be more of a blockbuster going forward.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
