Please ensure Javascript is enabled for purposes of website accessibility

Why DryShips, United Therapeutics, and Fiat Chrysler Automobiles Slumped Today

By Dan Caplinger - Apr 3, 2017 at 4:52PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

These stocks helped lead the market lower. Find out why.

Monday was a slow start to the week for the stock market, and major market benchmarks lost modest amounts of ground as investors paused following a strong first-quarter performance to start 2017. Earnings season is about to begin again, and the onus will be on companies to continue building positive momentum in order to push the overall market higher. Yet several companies came out with discouraging news today, and DryShips (DRYS), United Therapeutics (UTHR 1.82%), and Fiat Chrysler Automobiles (FCAU) 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.

DryShips deal makes investors nervous

Shares of DryShips plunged 19% after the shipping company said that it had entered into an agreement to sell as much as $226 million in common stock to financing source Kalani Investments Limited. Under the deal, DryShips has two years to sell stock to Kalani to raise cash under certain circumstances. In addition, DryShips said that it will buy a total of six vessels, spending $268 million to acquire ships in the Aframax, Kamsarmax, and very-large gas carrier categories. CEO George Economou praised DryShips' efforts to refresh the company's fleet, but some investors appear increasingly nervous that the level of risk that the shipping specialist is taking on could prove to be catastrophic if the market for ocean-based shipping doesn't improve quickly and markedly.

United Therapeutics deals with setbacks

United Therapeutics stock dropped 8% in the wake of two adverse pieces of news. Late Friday, the biotech specialist said that it had lost a patent dispute against SteadyMed with respect to several of its most important drug offerings, with the Patent Trial and Appeal Board finding that United's claims weren't in fact patentable. Then early Monday, United said that it would have to postpone the U.S. launch of its RemoSynch implantable system for its Remodulin treatment for pulmonary arterial hypertension. CEO Martine Rothblatt tried to reassure investors, noting that the delay "is a small miss in the context of our providing more U.S. pulmonary arterial hypertension patients with helpful medicines than any other country." Nevertheless, investors want to see United Therapeutics taking full advantage of leadership opportunities in the field, and today's concerns made shareholders nervous looking forward.

Jeep Renegade from Fiat Chrysler.

Image source: Fiat Chrysler.

Fiat sees lower industry sales

Finally, shares of Fiat Chrysler Automobiles finished down 5%. The automaker led the major auto stocks downward in the wake of sluggish sales results for March, which included the worst overall levels in over two years. Fiat in particular said that U.S. sales dropped 5% to just over 190,250 units, falling from nearly 200,000 units sold in March 2016. Despite the news, several Fiat Chrysler brands showed successful numbers, including a 10% rise for the Dodge brand, 6% gains for Ram Trucks, and a 22% jump in sales of the Jeep Grand Cherokee. Double-digit percentage gains for the Fiat 500 also showed the value of combining the Fiat and Chrysler names, but other Jeep and Chrysler brands suffered substantial declines to weigh on the company's overall growth. If this is the feared slowdown that investors have anticipated for years, then Fiat Chrysler could remain under pressure for some time.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

United Therapeutics Corporation Stock Quote
United Therapeutics Corporation
$238.29 (1.82%) $4.27
DryShips Inc. Stock Quote
DryShips Inc.
Fiat Chrysler Automobiles N.V. Stock Quote
Fiat Chrysler Automobiles N.V.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.