The stock market bounced back on Tuesday, with investors focusing on strong economic data and favorable earnings reports from a wide variety of companies to create a generally optimistic view of the investing world. Inflation data showed a solid advance in prices, which is reassuring those who had feared that the prospect of deflation could give monetary policymakers no choice but to continue to leave rates at unusually low levels for the foreseeable future. Yet even though the Dow finished the day with gains of 75 points and other major market benchmarks climbed between 0.5% and 1%, some stocks weren't able to join in the upward movement. Among the worst performers today were W.W. Grainger (NYSE:GWW), Badger Meter (NYSE:BMI), and Nektar Therapeutics (NASDAQ:NKTR).

Image source: Grainger.

Grainger sees tougher times ahead

W.W. Grainger fell 4% despite posting fairly solid third-quarter financial results. The maker of maintenance, repair, and operating products reported a 3% rise in sales, with a decline in outstanding shares more than offsetting falling net income to produce a 4% rise in earnings per share figures. However, Grainger said that because of a tough fourth quarter, it had decided to narrow its guidance, reducing the midpoint of its range. The company now expects sales growth of just 1.5% to 2.5%, compared to its previous 1% to 4% range. Earnings of $11.40 to $11.70 per share would be in the lower half of its previous $11.20 to $12.20 per share range. As CEO DG Macpherson described it, "We continue to operate in a challenging economic environment," but the company is still optimistic that through cost management and smart growth initiatives, Grainger can still move forward.

Badger Meter can't meet the mark

Badger Meter dropped 7% after posting its own third-quarter results late Monday afternoon. The flow measurement, control, and communications solutions company said that its sales fell 4% compared to the prior year's third quarter, but it still managed to boost its net income by almost 6%, producing earnings of $0.30 per share. However, both figures were less than investors had expected to see, and investors didn't seem convinced by comments suggesting that some of Badger's challenges were temporary. As CEO Richard Meeusen noted, "The decrease in third-quarter sales reflected a softening of order input early in the third quarter; however, sales in the remainder of the quarter came in as anticipated." Nevertheless, even though positive results from core municipal water products were encouraging, weakness in residential and commercial products to the Middle East fell from year-ago levels, and operational backlogs delayed some shipments. If Badger can fix its internal processes, then it might be able to regain its lost ground today.

Nektar makes an offer

Finally, Nektar Therapeutics gave up 10%. The biotech company said late Monday afternoon that it had decided to make a secondary offering of newly issued common stock worth $175 million. The company said that it would use the net proceeds of the offering for general corporate purposes, including funding research and development and providing working capital. As often happens, investors reacted negatively to the idea that their existing shares would be diluted by the offering. Nektar's timing was far from perfect, given that the stock price had already fallen by roughly 20% from its highs just last month. Nevertheless, if the company's experimental drug for breast and brain cancer and its hemophilia treatment perform as well as investors hope, Nektar might still produce good returns for both old and new shareholders after the offering.

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