Wall Street started the latest earnings season on a fairly downbeat note, with the S&P 500 and Nasdaq Composite both seeing small declines even as the Dow Jones Industrial Average fell by a more modest percentage. Big banks were the first out of the gate, and although their earnings were generally strong, their outlooks for the rest of the year suggested uncertainty about the economy's prospects. Some companies also suffered from adverse events that sent their share prices lower. Western Digital (NASDAQ: WDC), Turquoise Hill Resources (NYSE: TRQ), and Range Resources (NYSE: RRC) were among the worst performers. Here's why they did so poorly.
Western Digital falls on industry fears
Shares of Western Digital dropped 6% after comments about another major player in the memory space seemed to reflect poorly on it. Stock analysts at UBS increased their price target on Micron Technology by $10 to $47 per share, but cited as part of their bullish argument the fact that Western Digital shut down its joint venture with Toshiba. Even with the supply contraction, analysts still seem worried about pricing for NAND and DRAM memory chips. That could bode poorly not just for Western Digital but also for Micron and other competitors in the space.
Image source: Western Digital.
Turquoise Hill has problems in Mongolia
Turquoise Hill Resources saw its stock plunge 44% following the Canadian gold and copper miner's release of its second-quarter production results. On their face, the production figures looked reasonable, with gold production rising more than 40% from year-ago levels. However, copper production was down slightly over the same period, and Turquoise Hill said that its Oyu Tolgoi copper mine in Mongolia could require much larger capital expenditures and see much longer delays in reaching long-term production goals than previously anticipated. With the need to work with larger mining company Rio Tinto on the project, Turquoise Hill could find itself getting pinned in between its project partner and the Mongolian government.
Range Resources deals with weak gas prices
Finally, shares of Range Resources finished lower by 7%. The energy company had to deal with bad news on the natural gas front, with futures prices falling around 4%. Today's losses built on share-price declines on Monday, which followed a downgrade from analysts at Jefferies from buy to hold. Energy analysts believe that oil and natural gas prices are likely to remain under pressure, especially as the natural gas market is experiencing a large supply glut. In the long run, Range Resources has plenty of potential to recover, but in order to make the most of its opportunities, it will need the energy markets to cooperate.
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