The stock market posted modest gains on Tuesday, with major benchmarks finishing not too far away from where they began the session. After such a strong first half of the year, investors aren't entirely certain whether the markets can keep up the pace indefinitely, especially as certain economic indicators have started to suggest a more defensive tone. Declines for several stocks also weighed on overall sentiment. EOG Resources (NYSE:EOG), Acuity Brands (NYSE:AYI), and BlackLine (NASDAQ:BL) were among the worst performers. Here's why they did so poorly.
EOG follows oil lower
Shares of EOG Resources dropped 6% on a tough day for oil stocks in general, as crude oil prices were weak. Prices for West Texas Intermediate crude fell more than $2.50 to $56.50 per barrel, and that sent shivers throughout the energy sector. For EOG Resources in particular, success in shale plays has brought big rewards, and the company is ambitious to keep taking advantage of high-profit opportunities to expand. Balancing fiscal discipline with aggressive investment is always a challenge, though, and shareholders today seem worried that a weaker pricing environment for crude oil could put a damper on EOG's ability to grow at the pace it would like.
Acuity deals with disappointment
Acuity Brands saw its stock tumble 8% following the release of its fiscal third-quarter financial report. The lighting and building management solutions provider said that sales rose just 0.4% compared to the year-earlier quarter, and adjusted earnings per share climbed just 7%. CEO Vernon Nagel noted that some of the disruption might have been due to price increases that Acuity put into place, as savvy customers got a jump by pulling some of their anticipated orders into prior quarters to avoid the price hikes. Yet the CEO also noted sales for the fourth quarter could drop from last year's levels, and investors didn't seem very patient to wait until fiscal 2020 to see more of the fruits of Acuity's strategic moves.
BlackLine takes a double ding
Finally, shares of BlackLine fell 7.5%. The accounting solutions specialist was the subject of a rare move by analysts at Goldman Sachs, who downgraded the stock all the way from buy to sell and cut their price target by $16 to $41 per share. Goldman is concerned that BlackLine won't be able to grow as quickly as Wall Street currently expects, and given investor appetite for software-as-a-service companies, valuations might be stretched too thin. BlackLine provides a valuable service for its clients, but that won't save the stock from further declines if it can't live up to shareholders' growth expectations.