Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Twitter made a strong start, but it wasn't enough to rescue the Dow Jones Industrials (DJINDICES:^DJI), which fell back from yesterday's record-high levels to drop almost 153 points. More broadly, markets appeared nervous about the implications of a surprise rate cut in Europe, and in particular, SolarCity (NASDAQ:SCTY), Wendy's (NASDAQ:WEN), and Tesla Motors (NASDAQ:TSLA) all suffered large declines today. Let's find out what happened to send these stocks lower.
SolarCity fell 17% in the aftermath of its earnings report last night, again demonstrating the challenges that high-growth stocks face in keeping investors satisfied. Even though the residential solar specialist grew sales at a much faster pace than investors had anticipated, adjusted losses didn't meet expectations. Poor short-term guidance also disappointed traders, but as Fool solar expert Travis Hoium reminded long-term investors today, SolarCity's near-term results are meaningless in comparison to its future potential in decades to come, especially if SolarCity keeps taking market share in the growing residential space.
Wendy's dropped 11% after its third-quarter earnings report. Although the restaurant chain reported better adjusted earnings and revenue for the quarter than investors had projected, Wendy's said its adjusted earnings before income taxes, depreciation, and amortization would fall 10% year over year in the fourth quarter. Still, the stock drop was somewhat surprising given that Wendy's boosted its full-year earnings guidance, although part of the reason for the downward move might simply have been that Wendy's shares had risen to a multiyear high yesterday.
Tesla Motors declined another 7.5% after an even bigger plunge yesterday following its third-quarter earnings report. The company confirmed a third incident involving a Tesla Model S catching fire, with an accident causing the fire in Tennessee earlier this week. Despite CEO Elon Musk's assurances that the company's battery systems are safer than flammable-fuel-based vehicles, Tesla needs to get this problem resolved quickly in order to restore consumer confidence in the vehicles.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends and owns shares of SolarCity and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.