The stock market did something it hasn't done very often lately, as some key indexes moved higher even as others gave up ground. A big jump in the Nasdaq Composite's largest component helped push that index to a healthy gain, but the Dow Jones Industrial Average eased lower on the day. Investors were generally focused on the same macroeconomic and geopolitical issues that they've watched closely for months, and second-quarter earnings season continued to play a key role in moving individual issues. Some companies had bad news that sent their shares sharply lower despite the generally benign environment. Ferrari (NYSE:RACE), Baidu (NASDAQ:BIDU), and Caesars Entertainment (NASDAQ:CZR) were among the worst performers on the day. Here's why they did so poorly.
Ferrari runs off the road
Shares of Ferrari fell 11% after the luxury automaker's new chief executive made some comments that made investors nervous about its future prospects. CEO Louis Camilleri characterized the financial targets that predecessor Sergio Marchionne had set as "aspirational," raising fears that the company won't treat those goals seriously and therefore won't reach them. Camilleri also wasn't able to disclose details on exactly how he and his leadership team expect to achieve the targets, instead promising more details at an investor presentation next month. Marchionne will be a tough act to follow, and some fear that Camilleri won't be able to translate his success as a former tobacco executive to the auto industry.
Baidu stock dropped 8% in the wake of competitive pressures following the Chinese online search giant's second-quarter financial report. Investors responded negatively to news that U.S. rival Google, the main subsidiary of Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), expects to offer a censored search engine in China to go up against Baidu's offering. That was enough to make shareholders ignore what was otherwise a strong quarterly report from Baidu, which included adjusted net income gains of more than half and a 32% rise in revenue from year-ago levels. Even if Google does end up re-entering China successfully, it'll take a lot to make Chinese users abandon their devotion to Baidu's core search product.
Caesars wants you to get a room
Finally, shares of Caesars Entertainment plunged 15%. The casino resort company reported its second-quarter financial results, which included disappointing trends in the pricing of hotel rooms in the Las Vegas market. Caesars said that rising competition has led to poor industry conditions in the U.S. gambling mecca, and the combination of reduced convention activity in Las Vegas and generally slow traffic among vacationers is forcing it to consider cutting room rates to attract more business. Given that Caesars has relatively little exposure to international gaming markets, bad news from Vegas and the potential challenges from competitors in the regional casino realm add up to a lot of uncertainty for the casino company and its investors.