Please ensure Javascript is enabled for purposes of website accessibility

What Happened in the Stock Market Today

By Jim Crumly – Updated Apr 22, 2019 at 10:55AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Worries about an economic slowdown sent stocks south. Plus, 2019 guidance from Johnson & Johnson and Stanley Black & Decker raised some concerns.

Reports of slowing economies in China and Europe along with some weak guidance spooked investors returning from a long weekend Tuesday. The Dow Jones Industrial Average (^DJI) and the S&P 500 (^GSPC 0.25%) fell sharply but partially bounced back in the last hour of the session.

Today's stock market

Index Percentage Change Point Change
Dow (1.22%) (301.87)
S&P 500 (1.42%) (37.81)

Data source: Yahoo! Finance.

Energy stocks and industrials led the market down. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP -1.36%) plunged 4.2% and the Industrial Select SPDR ETF (XLI 0.42%) lost 2.1%.

Two companies helped put the market in a dour mood. Johnson & Johnson (JNJ -0.39%) and Stanley Black & Decker (SWK 2.06%) both gave disappointing forecasts for 2019.

Declining black and red graph.

Image source: Getty Images.

Johnson & Johnson projects slowing growth

Check out the latest Johnson & Johnson earnings call transcript.

Johnson & Johnson reported fourth-quarter results that beat expectations, but forecast sales growth slowing in 2019, and shares fell 1.5% on the news. Sales for the quarter were up 1% to $20.4 billion and adjusted earnings per share increased 13.2% to $1.97. Analysts were expecting earnings of $1.95 on sales $20.17 billion. 

Excluding the effect of acquisitions and divestitures and in constant currency terms, Johnson & Johnson's sales increased 5.5% in 2018. Looking forward, though, the company expects 2019 sales growth on that basis to slow to between 2% and 3%. Organic growth of $4.6 billion to $6 billion is expected to be partially offset by losses of $3 billion to $3.5 billion as a result of competition from generic drugs and biosimilars.

Johnson & Johnson is also experiencing drug pricing pressure, with CEO Alex Gorsky saying on the conference call that net prices of pharmaceuticals declined between 6% and 8% in 2018. 

Stanley Black & Decker sees economic headwinds ahead

Check out the latest Stanley Black & Decker earnings call transcript.

Tool manufacturer Stanley Black & Decker stoked concerns about a global economic slowdown when it turned in anticipated results for the fourth quarter but guided to 2019 profit well below expectations, sending shares down 15.5%. A 4.9% increase in net sales to $3.63 billion was just above the analyst consensus, and adjusted earnings per share of $2.11 beat it by $0.01.

Sales volume grew 5%, acquisitions added 2% of growth, and price increases tacked on another 1%, offsetting 3% of currency losses. Gross margin fell 2.8 percentage points, though, due to commodity inflation, foreign exchange, and tariffs.

Looking forward, Stanley Black & Decker sees continued "external headwinds" and forecast adjusted earnings growth between 4% and 6%, well below the 7.7% increase analysts had been expecting. The company gets 29% of its sales through mass merchandisers and home centers, so the projected weakness, on top of similar stories from other companies this month, helped fuel investors' worry today.

Jim Crumly owns shares of Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.