The stock market showed its resilience once again on Wednesday, as the Dow had a 700-point swing during the day that ended up in 231-point advance for the key market average. Broader benchmarks were up between 1% and 1.5% after having opened the session down a similar percentage in response to moves from China to impose retaliatory tariffs on key U.S. exports. Investors chose to see the wrangling as a nonevent from a long-term perspective, but bad news from some individual companies kept some stocks from participating in the rally. Hortonworks (NASDAQ:HDP), Gannett (NYSE:GCI), and Acuity Brands (NYSE:AYI) 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.
Hortonworks falls in sympathy
Shares of Hortonworks dropped 6% as investors responded to bad news from one of the company's industry peers. Shares of Cloudera, which like Hortonworks is involved in the cloud software niche, plunged around 40% after reporting sales growth in its fourth-quarter financial report that failed to live up to investors' high-growth expectations. High-flying tech stocks have seen increasing pressure lately as shareholders demand a greater margin of safety on their investments, and today's move suggests that there's at least some concern that the entire cloud sector could suffer going forward. Hortonworks will have its own turn to report earnings early next month, and investors hope that it will avoid Cloudera's fate and recover lost ground from today.
Gannett makes an offer
Gannett stock fell nearly 6% after the newspaper publishing giant announced details of a capital-raising offering. Gannet sold convertible six-year senior notes with a face value of $175 million, carrying a coupon of 4.75% and allowing holders to convert their bonds into Gannett shares at a ratio of just under 82.5 shares of common stock for every $1,000 in bond par value, which works out to a conversion price of just over $12 per share. That could be dilutive to existing shareholders if Gannett makes gains in the coming years, but as interest rates rise, it's becoming more important to restructure debt expeditiously in order to avoid less attractive terms in the future.
Acuity falls short
Finally, shares of Acuity Brands lost 4%. The lighting and building management solutions provider said that its fiscal second-quarter financial results included just a 3% rise in net sales, and adjusted operating profit fell 16% compared to the year-ago quarter. A net benefit from the Tax Cuts and Jobs Act helped to boost Acuity's bottom line, but CEO Vernon Nagel noted that "the lighting market in the U.S. was flat to down low-single digits, reflecting continued weakness of non-residential construction in certain markets." Even Acuity's decision to authorize the repurchase of as many as 6 million shares of stock wasn't enough to give investors much comfort, and the company needs to see better industry conditions before it will convince all of its shareholders that the future is bright.