Wall Street suffered another crushing blow on Friday, with the Dow closing down 425 points and finishing a week in which the benchmark average lost more than 1,400 points. Most investors focused their attention on the trade front, making dire conclusions about the potential for escalating tensions between the U.S. and major trading partners across the globe. Yet others simply pointed to the fact that the market failed to return to record highs after its early February correction, and major benchmarks stand on the precipice of falling below their worst levels from last month. Not helping matters was bad news from several individual companies whose shares fell more precipitously than stocks did overall. Western Digital (NASDAQ:WDC), Westport Fuel Systems (NASDAQ:WPRT), and Ferroglobe (NASDAQ:GSM) were among the worst performers on the day. Here's why they did so poorly.
Western Digital falls in sympathy
Shares of Western Digital dropped more than 8%, reacting as one of its key rivals in the memory-chip space fell sharply despite a relatively positive earnings report for its fiscal second quarter. Micron Technology reported a nearly 60% jump in sales, with adjusted net income more than tripling from year-ago levels. Yet analysts were concerned that the entire memory-chip market could be hitting a peak, especially with some major players choosing to boost production and potentially exacerbate the next downward phase of the endlessly cyclical industry. Even with today's drop, Western Digital shares have still doubled in less than two years, and many see more potential for gains.
Westport hits the brakes
Westport Fuel Systems stock fell 11.5% after the company announced a loss in the fourth quarter. The maker of natural gas-powered engine systems emphasized the business gains that it had made in 2017, which included major strategic decisions to refocus on core businesses and a massive debt restructuring to improve its balance sheet strength. The launch of Westport's HPDI 2.0 system for the heavy-duty truck market was important, but the company still identified a number of strategic necessities for the coming year that will require strong execution. Until Westport gets further along in its turnaround efforts, shareholders will likely see continued pressure on the stock.
Ferroglobe loses the battle
Finally, shares of Ferroglobe plunged nearly 24%. The maker of silicon raw materials for use in solar modules and other components had filed a petition alleging trade violations by silicon producers in three countries, including Australia, Brazil, and Kazakhstan. Yet although the Commerce Department found that there were transactions at less than fair market value, the International Trade Commission didn't find evidence of material injury to the market. Shareholders seemed surprised at the decision not to impose anti-dumping duties, although some bullish investors think that the silicon market is still fundamentally strong enough to support Ferroglobe's underlying business.