Wall Street enjoyed a positive session on Monday, with highlights including strong gains for most major benchmarks. Investors found it easier to be optimistic about the prospects for continued economic growth than to be pessimistic about the potential negative outcomes of recent trade disputes between the U.S. and key allies. Even so, some companies had to deal with bad news that hurt them disproportionately and sent their shares lower. Canadian Solar (CSIQ -0.60%), Nektar Therapeutics (NKTR 4.04%), and Gulfport Energy (GPOR) were among the worst performers on the day. Here's why they did so poorly.
Canadian Solar deals with trade clouds
Shares of Canadian Solar dropped 14% after the Chinese government made changes to the way it subsidizes solar projects. China decided to stop providing subsidies on new regular solar projects this year, and even among those that are already in the process of getting built, the government will cut its incentives by 0.05 Chinese yuan per kilowatt-hour. Although there are some exceptions to the rules, most Chinese solar stocks fell on the news, and despite its name, Canadian Solar has ample enough exposure to China to feel many of the same pressures as its industry peers. With China having been a major part of expansion in the solar industry in recent years, any slowdown will have dramatic impacts across the spectrum.
Image source: Canadian Solar.
Nektar turns sour
Nektar Therapeutics stock plunged 42% after the biotech company announced disappointing results for a key candidate treatment. New data on NKTR-214 presented at the American Society of Clinical Oncology's annual meeting sparked debate about just how effective the treatment might be. In particular, after having produced exceptionally strong early results last year in its trial treating melanoma patients with a combination of NKTR-214 and Bristol-Myers Squibb's Opdivo, Nektar's latest study results show slightly weaker overall response rates when you include newly enrolled patients. Industry analysts made extremely negative comments about the results, raising doubts among investors about whether recent optimism about Nektar's prospects was fully warranted.
Gulfport follows oil lower
Finally, shares of Gulfport Energy lost 9%. Today was another poor day for the energy markets overall, with crude prices falling more than 1% to drop past the key $65-per-barrel level. Gulfport in particular has seen relative strength recently, with its first-quarter financial results signaling a good start to 2018. Yet even though forecasts for higher production looked good when oil prices were skyrocketing past the $70 mark, some shareholders appear nervous about the prospects for another pullback in the markets and the impact it could have on Gulfport. Investors need to prepare for continued volatility and look carefully at how Gulfport responds to any challenges that might come up in order to decide whether to maintain their confidence in the stock.
