Well, this is disappointing. What began as a green day in the stock markets, presaging the first back-to-back days of positive stock gains in who can remember how long, has faded to black -- or more precisely, to red.
At the close today, the S&P 500 and the Dow were both down over 4%, and the Nasdaq was down almost 4%. Helping to lead the market lower were large industrial stocks 3M (NYSE:MMM), Harley-Davidson (NYSE:HOG), and Lockheed Martin (NYSE:LMT) -- down 9.1%, 13.3%, and 7.3% respectively.
It certainly smarts that all three of these companies began the day in the green, notching at least small fraction-of-a-percent gains before dipping back into the red. But why are these stocks moving lower?
There's no news of particular note -- specific to the companies named -- that would account for their individual declines. To the contrary, Lockheed Martin, which has been the hardest hit of the three, was awarded a pretty sizable $601.3 million defense contract on Thursday by the Pentagon, which is hiring Lockheed to produce and support submarine-launched Trident II D5 ballistic missiles for the Navy.
Admittedly, this contract win wasn't a huge surprise. Lockheed has been building Tridents for the Navy for more than 30 years. But still, a win is a win. Logically, it shouldn't result in a loss for the stock.
And yet Lockheed went down. And potentially, we could see further losses for Lockheed, Harley-Davidson, and 3M -- and other large industrial stocks.
Two days ago, American automakers Ford, GM, and Fiat Chrysler all closed down their factories to help prevent the spread of COVID-19 among their respective workforces. So, too, did Harley-Davidson. 3M hasn't announced any closings that I'm aware of, and indeed, it's working overtime to produce protective respiratory masks for frontline healthcare workers. But that's only a sliver of 3M's total business, which is much bigger than face masks.
If more factory closings become the headline of tomorrow, Lockheed, Harley, and 3M may not be the only industrial stocks to suffer in the days and weeks to come.