Tuesday was another solid day for stocks, and a rising Dow, S&P 500, and Nasdaq Composite all helped sustain positive sentiment toward the prospects for the economy, especially in the U.S. market. Gains for the major benchmarks weren't all that substantial, but they still reflected the overall optimism that Americans have about the current state of affairs. Despite ongoing political and global economic uncertainties, most market participants seemed willing to look on the bright side as they anticipate seeing more economic data over the next week and a half.
Yet some stocks didn't hold up as well as the overall market, and Herbalife (NYSE:HLF), Alexion Pharmaceuticals (NASDAQ:ALXN), and Brown-Forman (NYSE:BF.A) (NYSE:BF.B) 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.
Herbalife falls on China nervousness
Shares of Herbalife closed down 6% as investors reacted negatively to news of the departure of a key executive in the company's Chinese operations. Li Yanliang, president of the Herbalife China unit, was removed from his role, according to a Chinese news source familiar with the company. Many investors seemed shocked by the move, especially given that Herbalife had seen much faster growth in sales in China than it has in its overall worldwide operations. Even with the pullback, Herbalife stock trades near its best levels in three years, but any lingering questions about the vitally important business in China could cause the stock's recent rally to take a pause until the matter is resolved to investors' satisfaction.
Alexion also sees executive departures
Alexion Pharmaceuticals stock dropped 9% after the company also suffered defections from the corporate suite. The biopharma said that CFO David Anderson, Chief Commercial Officer Carsten Thiel, R&D head Martin Mackay, and Chief Human Resources Officer Clare Carmichael will all be leaving the company, with Thiel and Carmichael's departures effective as of June, Anderson's in August, and Mackay's at the end of 2017. Alexion appointed Brian Goff as Thiel's replacement for chief commercial officer, but the company will have to do a search to fill the other three vacancies. The move comes amid dramatic turnover at Alexion, with CEO Ludwig Hantson having been on the job only since March. Once things settle down among the executive ranks, Alexion could bounce back, but for now, investors don't appear willing to wait and see how things play out.
Brown-Forman has a turbulent day
Finally, shares of Brown-Forman finished the day down 6%. The maker of Jack Daniel's and other spirits saw some wild swings late in the day, with the stock briefly spiking 5% higher on news that Constellation Brands (NYSE:STZ) was interested in making a takeover bid for its alcohol-industry peer. Yet those gains quickly evaporated when Brown-Forman rebuffed Constellation Brands, saying that it isn't interested in making a sale. The downward move gave up all of Brown-Forman's share-price gains from Monday, which had gone largely unexplained at the time. Given the power of the Jack Daniel's brand, it's entirely possible that Constellation could be back with a higher offer at some point in the future.