Wednesday wasn't a great day on Wall Street, but after big gains over the past couple of weeks, a pullback was likely inevitable. Even with market participants becoming increasingly confident that the Federal Reserve will save the economy from a slowdown by reducing interest rates, they nevertheless won't be entirely comfortable with that investing thesis until they see actual movement from the central bank. Losses for major indexes were mostly modest, but some individual companies had bad news that sent their shares more sharply lower. Micron Technology (MU -4.61%), Hooker Furniture (HOFT 1.44%), and Nabors Industries (NBR -0.66%) were among the worst performers. Here's why they did so poorly.
Micron keeps struggling
Shares of Micron Technology fell more than 5%, adding to its weakness over the past month as investors continued to question whether it'll be able to rebound from poor conditions in the chip market. Recently, Micron said that it had expected the downturn in memory chip demand to hit bottom later this year, setting the stage for a 2020 recovery. Yet analysts at Evercore ISI questioned that thesis, and they seem to think it's more likely that trade tensions and other factors could keep weighing on memory prices and thereby hurt Micron's profits. Investors know that Micron's business is cyclical, but they've gotten impatient to see a rebound that might take longer to come than initially hoped.
Image source: Micron Technology.
High costs hit Hooker
Hooker Furniture saw its stock plummet 24% after the furniture specialist reported its first-quarter financial results. Hooker said that net sales were down more than 5% from year-ago levels, prompting a disturbingly large 72% plunge in net income. CEO Paul Toms Jr. said that soft retail conditions in home furnishings, tariffs, and cost issues in its Home Meridian segment all contributed to the disappointing performance, and falling levels of orders and backlogs persisted throughout the quarter. Hooker hopes that business conditions will start to improve as the year progresses, but it's expressed similar hopes before, and moves to resource Chinese imports to Vietnam suppliers will be a distraction that the company doesn't need right now.
Nabors falls with crude
Finally, shares of Nabors Industries dropped 12%. Many players in the energy industry experienced similarly significant losses, as the crude oil market saw large declines. West Texas intermediate crude prices fell $2.25 to drop to the $51-per-barrel mark, and that will put even more pressure on oil and gas exploration and production companies to be smart with their capital expense budgets. That's especially bad news for companies like Nabors that offer offshore drilling platforms to clients, because offshore projects tend to have higher costs that make them most vulnerable to falling oil prices. Until the energy market turns, it could be tough for Nabors to mount a lasting recovery.
