It was a relatively unremarkable day on Wall Street today, a low-volume session that lacked astounding economic data or headline-making broad market swings. But beneath the stock market's calm surface, there was a healthy dose of chaos brewing -- a chaos that investors in Diamond Offshore Drilling (DO), Bristol-Myers Squibb (BMY -8.71%), and Allergan (NYSE: AGN) would not enjoy. These three stocks ended as the worst performers in the entire S&P 500 Index (^GSPC -0.55%) today, as the S&P ended at an all-time closing high of 1,927 after notching a 3-point, or 0.2%, gain.
Diamond Offshore Drilling stock suffered the worst of it on Wednesday, logging a 3.7% slump after Statoil cancelled a contract on Diamond Offshore's Ocean Vanguard rig. While the circumstances leading to the cancellation are extremely vague, Statoil reportedly claimed the move was made because of the "technical aspects" of the rig, an assertion Diamond Offshore is denying. Investors hate to see controversy like this arise with a contract like Ocean Vanguard's, which was supposed to bring in $454,000 a day through February 2015.
International pharmaceutical giant Bristol-Meyers Squibb fell 3% in trading today, marking its third consecutive day of losses. Curiously enough, the stock began to fall after the company shared the results of an encouraging study on a combination treatment for patients with late-stage melanoma. Combining two different drugs in Bristol's arsenal, Yervoy and nivolumab, the study observed the effects of the combo treatment, reporting 94% one-year survival rates and 88% two-year survival rates in the 127-person test.
Allergan's popular Botox treatment. Source: Allergan website.
Lastly, shares of Allergan tumbled, dropping 2.4% on Wednesday. Unlike Diamond Offshore Drilling and Bristol-Meyers Squibb, the prospects for Allergan's business haven't changed in the last few days. Allergan finds itself in an unusual position: the company is reluctantly receiving offers from Valeant Pharmaceuticals, which would like to purchase the maker of Botox. Allergan's board of directors is holding out for a higher bid, and already snubbed a sweetened offer from Valeant last week. Now Bill Ackman's hedge fund Pershing Square, which owns about 10% of Allergan, is trying to mount a coup against Allergan's board of directors to ensure the acquisition will go through. With the uncertainty around the terms and viability of any deal so high, it's no wonder shares are volatile.
