Why Marathon Petroleum, Dollar General, and Teradata Tumbled Last Week

The S&P 500 (SNPINDEX: ^GSPC  ) didn't manage to make more gains last week, but it didn't fall too far, either, with a drop of just a couple of points reassuring many that the stock market is still in prime position to rebound and reach new record levels in the near future. Yet downward pressure from many stocks within the S&P 500 contributed to the week's losses, and Marathon Petroleum (NYSE: MPC  ) , Dollar General (NYSE: DG  ) , and Teradata (NYSE: TDC  ) were among the worst performers in the index.


Source: Marathon Petroleum.

Marathon Petroleum's 11% loss came amid substantial drops throughout the refining industry as the company came to grips with a U.S. Department of Commerce decision allowing two companies to export a form of condensate, or what many are calling ultra-light crude oil. Many investors panicked at the outset, figuring that the decision signaled a huge change in U.S. trade policy that would eventually open the floodgates to wholesale export of all types of U.S.-produced crude and therefore eliminate the cost advantage for domestic crude that Marathon Petroleum and its peers have taken advantage of for years. Yet it's far from clear that the Commerce Department decision is anything other than a short-term response to current conditions in the domestic oil and gas market, and even in a worst-case scenario, Marathon Petroleum should be able to adapt to limit any damage to its margins in the long run.

Source: Dollar General.

Dollar General fell 9% as investors reassessed the likelihood of a merger with one of its major peers in the dollar-store industry in light of the resignation of CEO Richard Dreiling. Activist investor Carl Icahn has argued that consolidation in the dollar-store arena is necessary to help companies eliminate cannibalizing each other's business opportunities and to eliminate duplicated costs. Yet with Dreiling leaving the company, Dollar General will have to focus its efforts on finding a replacement chief executive to lead the company forward. Unless that search leads Dollar General toward exactly the merger Icahn has in mind, any merger efforts might get put on the back burner until the top-spot situation gets resolved.

Teradata dropped 8% in a steady weeklong decline. Early in the week, an analyst downgrade raised questions about whether the data warehousing and analytics provider will be able to deal with competition from other service providers in the industry. In particular, Hadoop and other companies using more comprehensive open-source solutions represent a threat to Teradata, with some customers pointing to cost advantages from using Teradata's competitors. For its part, Teradata released a tool this week that improved the performance of certain open-source analytics platforms, but the company has to do more to keep its overall growth rate moving in the right direction.

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