Wall Street enjoyed Thursday's market action, with most major benchmarks climbing close to half a percent. A pause in the plunge in long-term interest rates gave investors a bit more confidence in the stock market's prospects, and many saw potential positives in the form of more favorable mortgage rates that could spur greater U.S. economic growth from the housing market. Yet even amid that positive sentiment, some stocks suffered as bad news hit individual companies. Sprint (S), Wabco Holdings (WBC), and Sibanye-Stillwater (SBSW 4.48%) were among the worst performers. Here's why they did so poorly.
Sprint deals with doubters
Shares of Sprint dropped 6%, pacing a generally poor day in the wireless telecom sector. Investors have waited a long time to see whether Sprint's merger with T-Mobile US will gain approval, but they had to grapple with reports that attorneys general in various states could be looking to fight the merger on anticompetitive grounds. Sprint has argued that it lacks the ability to be a viable competitor as an independent entity, but not everyone has agreed with that position. With the industry looking at major investments in 5G technology, Sprint shareholders would rather get the T-Mobile deal done and work on upgrading networks in a competitive way.
Wabco sells out
Wabco Holdings saw its stock fall 10% in the wake of its agreeing to an acquisition bid from a German industry peer. Privately held driveline and chassis specialist ZF Friedrichshafen said it would pay $136.50 per share in cash for Wabco, putting a value of more than $7 billion on the vehicle technology supplier. ZF noted that its offering price was 13% higher than where the stock closed prior to reports that Wabco was considering a sale, but investors had clearly hoped that the two companies would agree to a higher price. ZF hopes that it'll be able to use Wabco technology to expand its presence in the autonomous driving space, but it's unclear whether Wabco shareholders will approve the deal or hold out for more.
Sibanye-Stillwater watches palladium sink
Finally, shares of Sibanye-Stillwater sank 10%. The precious metals miner has benefited from the recent surge in palladium prices, but over the past couple of days, the bottom has fallen out of that market, with prices of the platinum-group metal plunging more than $275 per ounce over the past week to around $1,325 per ounce. In addition, investors continue to digest news that Sibanye won't seek to extend mining operations at its Driefontein mine in South Africa. With conditions in the African mining industry deteriorating, Sibanye is just one of many local miners facing extreme challenges in finding profitable business there.