The stock market was strong on Friday, as the Dow Jones Industrial Average posted a triple-digit gain and other major indexes saw even larger rises on a percentage basis. Generally good earnings from significant companies and optimism about the future course of U.S. monetary policy prompted the move upward, and news late in the day that the government shutdown might come to an end was also generally positive. Yet some companies had bad news that caused their shares to decline. Intel (NASDAQ:INTC), AbbVie (NYSE:ABBV), and Vale (NYSE:VALE) were among the worst performers. Here's why they did so poorly.
Intel can't live up to its promise
Shares of Intel fell more than 5% after the semiconductor giant reported its fourth-quarter financial results. The chipmaker managed to grow revenue, but not as quickly as most had hoped, and key growth drivers like the data center segment failed to produce the results that investors were looking to see. Intel also warned that demand for servers could remain weak into the beginning of 2019 as well. With competition growing fiercer, even the hint of a slowdown was enough to put Intel shareholders on edge, especially after having endured years of underperformance throughout the 2000s and early 2010s.
Pharmaceutical company AbbVie saw its stock drop 6% in the wake of the release of its results for the fourth quarter. The drugmaker's growth in sales and profit failed to match what shareholders expected, and many investors seemed troubled by the extent to which biosimilar competition for its blockbuster drug Humira ate into sales. The company also warned that earnings growth in 2019 would slow dramatically from 2018's pace. AbbVie has plenty of prospects in its pipeline that could help it make up for the eventual decline of Humira's success, but investors want proof before they'll be entirely comfortable with the pharma giant's future.
Dam collapse hits Vale hard
Finally, shares of Vale finished lower by 8%. A dam for containing mine tailings at one of Vale's iron ore mines in the southeastern Brazilian state of Minas Gerais burst, sending sludge and other material into surrounding areas. Early reports said that more than 200 people were missing following the collapse, and many residents had to be evacuated. The tragedy comes as Vale has tried to rebound from poor conditions in the mining industry in recent years, and investors are concerned about the potential consequences for Vale from the dam collapse.