Wednesday was another strong day for the stock market, with major market benchmarks including the Dow, S&P 500, and small-cap Russell 2000 setting new all-time record highs. Holiday cheer and ongoing enthusiasm about the future of the U.S. economy continued to drive gains for the broader market, but some stocks still missed out on the rally. In particular, Eli Lilly (NYSE:LLY), Kinross Gold (NYSE:KGC), and HP Inc. (NYSE:HPQ) 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.
Lilly suffers an Alzheimer's drug setback
Eli Lilly fell 11% after the drug company said that its candidate Alzheimer's disease treatment solanezumab failed to meet its primary endpoint of statistically significant slowing of cognitive decline compared to a placebo. Although the results of the study did point to some positive effects from the drug, Lilly said that the magnitudes of those effects were small. As a result, Lilly said that it will not seek to make any submissions to regulatory authorities seeking to have solanezumab approved for treating mild dementia related to Alzheimer's disease. Incoming CEO David Ricks said that "Lilly has strong growth prospects without solanezumab," confirming that it remains committed to growing revenue by 5% per year through 2020. Nevertheless, the stock's move indicates just how hopeful investors were that Lilly could produce a success in fighting Alzheimer's with this drug.
Kinross looks less golden
Kinross Gold dropped 8% on a tough day for the gold market. Gold prices have reacted negatively to the big spike in U.S. bond yields since the presidential election, and the 10-year Treasury bond hit levels not seen since mid-2015. The U.S. dollar also continued to climb, reaching its highest value in more than a decade by one measure. Gold prices fell $24 per ounce to $1,188, with precious metals investors reacting negatively potentially higher financing costs as well as adverse currency-market conditions. Combine that with a downgrade on Tuesday from Merrill Lynch from buy to neutral for Kinross in particular, and it's clear why the gold miner succumbed to downward pressure today.
HP takes another hit
Finally, HP declined 7%. The portion of the former combined Hewlett-Packard entity that concentrates on PCs and printers reported a 2% rise in revenue in its fiscal fourth quarter, and adjusted earnings of $0.36 per share were consistent with what HP had predicted in its guidance. However, HP's results showed large differences in how its underlying segments performed, with PC systems climbing sharply on strength in notebook sales, but printing revenue falling 8% from the year-ago quarter. Guidance for full-year fiscal 2017 adjusted earnings of $1.55 to $1.65 per share didn't bring any surprises to shareholders, but the big question is whether a business model that is reliant on parts of the technology business that face the largest challenges will be able to overcome those headwinds and produce future growth quickly enough to satisfy investors.