Wednesday was an up-and-down day on Wall Street. Major benchmarks started the day sharply lower as concerns about rising interest rates continued to swirl among those following the financial markets. Investors then seemed to get more comfortable with the current state of affairs, leading to a rebound, but further volatility left the Dow with only modest gains by the end of the session. Some bad news from key companies also weighed on overall sentiment. Snap (NYSE:SNAP), Teradyne (NASDAQ:TER), and Owens Corning (NYSE:OC) were among the worst performers on the day. Here's why they did so poorly.
Snap makes more changes
Shares of Snap fell 7% after the social media company tried to appease its users by making further changes to Snapchat's user interface. Snap's initial redesign came out to horrible reviews, as a large number of influential celebrities said in high-profile messages that they didn't like the new platform and had stopped using Snapchat as a result. The company initially said that it didn't care about critical backlash, but with Snap now doing an about-face, investors wonder whether its upcoming earnings report will reflect a big decline in user engagement following the redesign -- and whether users will bother coming back even if the newest change looks better.
Teradyne has bad news for smartphone makers
Teradyne stock plunged more than 16% in the wake of its warning that future revenue will be under pressure because of weak mobile device demand. Part of Teradyne's business is providing testing equipment for semiconductor-based products like mobile devices, and in its first-quarter financial report, the company said that it believes a solid performance to start the year will give way to more sluggish levels of business activity in the current quarter. Earnings for the quarter could be less than half what investors were expecting on nearly a 30% shortfall in revenue if Teradyne's worst predictions are correct, but many are extrapolating outward to what the news could mean for the makers of smartphones and tablets themselves.
Owens Corning: Not so pretty in pink
Finally, share of Owens Corning finished down 11%. The maker of fiberglass insulation and other building materials reported a 14% rise in revenue in the first quarter of 2018, but higher costs for raw materials hit the company's profit margin, leaving Owens Corning with much weaker earnings than investors had wanted to see. The materials maker was the latest in a series of industrial companies complaining about input costs, and that's raising broader concerns about whether inflationary pressures at the producer level could limit the earnings gains from tax reform and other positive factors. In particular, if rising rates cause the housing market's recent boom to stall, it could spell trouble for the companies that supply the materials needed for home construction.