The stock market continued its recent rally on Tuesday, coming out of the long holiday weekend with solid advances that sent major market benchmarks to new heights yet again. Solid earnings from a number of industries, especially consumer goods, helped to power positive sentiment about domestic economic prospects. Investors also continue to expect business-friendly initiatives from the federal government that could boost profits going forward. Yet some stocks missed out on the rally, and Momenta Pharmaceuticals (MNTA), Northern Dynasty Minerals (NAK -1.17%), and Unilever (UL 0.19%) 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.
Momenta loses momentum
Shares of Momenta Pharmaceuticals dropped 16% in the wake of a warning letter from the U.S. Food and Drug Administration that overpowered relatively positive performance in the drugmaker's fourth-quarter financial report. Late Friday, Momenta said that manufacturing partner Pfizer had received the FDA warning letter, which covered a Kansas facility at which generic multiple sclerosis drug Glatopa is produced. Momenta and Novartis subsidiary Sandoz co-developed Glatopa, and although Momenta said that current production of Glatopa 20 mg products aren't restricted under the FDA letter, the FDA isn't likely to approve a pending application for a higher-dose Glatopa 40 mg product until the facility takes remedial action. As a result, Momenta believes that approval in the first quarter is now unlikely. Given that Glatopa represented more than two-thirds of the company's 2016 revenue, Momenta needs quick action to reassure investors of its long-term promise.
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Northern Dynasty's answers don't satisfy investors
Northern Dynasty Minerals' stock plunged 27% after the exploratory mining company's answer to a short-selling attack failed to produce a positive response from investors. The company argued that the statements last week from Kerrisdale asserting that the Pebble area isn't worth developing are incorrect, instead saying that the play "is one of the world's largest undeveloped copper and gold resources." Yet despite its attempts to refute negative comments by noting the economic interest that Kerrisdale has in seeing the stock fall, Northern Dynasty's long explanation of the history of Pebble and other mining companies' interest in the area bring it no closer to actual production, and investors seem to have focused on that aspect of the situation today.
Unilever misses its chance
Finally, shares of Unilever fell 7%. Would-be acquirer Kraft Heinz (KHC 1.31%) announced that in light of Unilever's rejection of its $143 billion merger bid, it had chosen to withdraw the bid entirely. The U.S. food company said that part of the reason it chose to take the bid off the table was that trying to negotiate in the public eye would be too hard, and it was surprised at the extent to which Unilever was opposed to the deal. In that light, Kraft Heinz believed that ongoing friendly discussions would likely be fruitless. Now both companies will have to find ways to satisfy disappointed shareholders and look for growth opportunities in a different direction.
