Wall Street wasn't happy on Wednesday, as a high-profile departure from the White House held back major market benchmarks. Gary Cohn, who served as chief economic advisor to the Trump administration, tendered his resignation amid ongoing debate about whether the U.S. should impose tariffs on steel, aluminum, and potentially other goods in order to gain leverage in trade negotiations with foreign nations. Investors tried to look on the bright side, helping indexes come back from their worst levels of the day, but some individual stocks still got hurt badly. Kroger (NYSE:KR), AeroVironment (NASDAQ:AVAV), and Spectrum Pharmaceuticals (NASDAQ:SPPI) were among the worst performers on the day. Here's why they did so poorly.
Kroger's pre-earnings jitters
Shares of Kroger fell 6% as investors anticipate the grocery chain giant's earnings release on Thursday. Most of those following the stock expect solid growth from Kroger, but the major strategic consideration is whether the ongoing onslaught from e-commerce retailers looking to supplant some demand for the foodstuffs that are so profitable for traditional grocers will hurt the company's long-term prospects. Meanwhile, comparable-store sales growth has been tepid at best over the past year. Kroger needs to demonstrate that it can keep improving, but today's share-price move suggests some skepticism about its ability to follow through.
AeroVironment hits an air pocket
AeroVironment stock plunged 15% after the drone maker announced fiscal third-quarter financial results. Overall company revenue was 20% higher from year-ago levels, led by strong performance in its unmanned aircraft systems business. Yet guidance for the current quarter remained relatively weak, expressing some apparent concern on the behalf of company insiders that AeroVironment might not finish its fiscal year on a strong note. If AeroVironment can execute well on its growing backlog of orders and keep attracting new business, then today's big drop in the stock will look anomalous in hindsight.
Spectrum deals with disappointment
Finally, shares of Spectrum Pharmaceuticals finished down almost 15%. The biotech company said in its fourth-quarter financial report that revenue fell almost 20% from year-earlier figures, prompting a wider net loss despite some one-time benefits from tax reform measures. Huge increases in costs hurt Spectrum's bottom line, and the company was also uncertain about whether it can reasonably expect expedited approval from the U.S. Food and Drug Administration for tumor-fighting candidate drug poziotinib. With investors growing impatient, Spectrum is feeling the pressure to come up with a faster-track plan to turn its promising treatments into blockbuster revenue producers.