Friday marked a fitting end to a good week for the stock market, with the S&P 500 and Nasdaq Composite posting solid gains of around 0.25% to 0.5% to end a successful third quarter of 2017. Favorable sentiment following the release of the federal government's tax reform proposal and good domestic economic data supported the ongoing advance of major market benchmarks, and investors still seem generally optimistic about the prospects for stocks heading into the final three months of the year. Still, some companies had to deal with disappointing news that led to their shares losing ground. GW Pharmaceuticals (NASDAQ:GWPH), Louisiana-Pacific (NYSE:LPX), and IAMGOLD (NYSE:IAG) 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.
GW Pharmaceuticals deals with competition
Shares of GW Pharmaceuticals finished lower by 11% in the wake of a successful clinical trial by one of the company's rivals. The cannabinoid treatment specialist has been looking to use its Epidiolex lead candidate drug to fight severe epilepsy syndromes such as Dravet syndrome, and investors have been optimistic about GW's prospects in the space. However, a small company called Zogenix said today that it had seen positive study results for its own Dravet syndrome treatment, including reduced seizure rates for patients. That could leave Epidiolex missing out on being the first available solution for treating Dravet syndrome, and investors weren't pleased with the potential for tougher competition than they had hoped.
Louisiana-Pacific takes a break
Louisiana-Pacific stock declined 5% as investors finally reined in their optimism following big gains earlier in the month. Just a few days ago, the stock had been up as much as 15% for September as investors responded favorably to anticipated higher demand for building products following major hurricanes affecting Texas, Florida, Puerto Rico, and other surrounding areas. As the construction industry in the U.S. has been improving throughout 2017, Louisiana-Pacific has reaped the rewards, but today's decline seemed to suggest that the stock had come too far too quickly. Even with the drop, long-term investors should still feel good about the company's fundamental strength.
IAMGOLD shines a little less brightly
Finally, shares of IAMGOLD sank over 8%. Often, mining stocks like IAMGOLD fall on poor days for the precious metals market, but a mild $6 contraction in gold prices to $1,280 per ounce doesn't really qualify as a major drop for the commodity. The recent decline is more likely tied to excess optimism earlier in the quarter, as IAMGOLD had been up as much as 40% between the end of June and early September before giving up about half of those gains. Favorable economic news suggests a greater likelihood of tighter monetary policy, and that tends to be bad for gold. On the whole, though, IAMGOLD aims to keep working toward cutting costs and being as efficient at production as it can be.