The stock market enjoyed a third consecutive day of gains on Wednesday, as industrial production numbers topped estimates and the Federal Reserve indicated it would keep interest rates near rock-bottom lows until the U.S. approaches full employment. The country is generally considered "fully employed" when the unemployment rate reaches its "natural" level, somewhere around 5%. With unemployment at 6.7% in March, we'll likely be seeing low rates for some time. Despite this overwhelmingly bullish news, shares of Linear Technology Corp. (LLTC +0.00%), Cliffs Natural Resources (CLF 5.16%), and Transocean Ltd. (RIG +1.51%) all fell sharply, ending as the worst performing stocks in the S&P 500 Index (^GSPC 0.61%). The S&P 500, for its part, did well today, adding 19 points, or 1.1%, to end at 1,862.
Shares of circuit-maker Linear Technology Corp. shed 4.4% on Wednesday, finishing as the biggest laggard in the 500-stock index. Linear Technology reported results for its fiscal third-quarter yesterday after the bell, disappointing investors. The company matched estimates on net income in the period but had the nerve to miss revenue projections by about 0.6%, a miss Wall Street saw as an incorrigible failure. CEO Lothar Maier, however, pointed out that bookings increased in each of Linear Technology's most important segments, highlighting the auto industry, the communications market, and the industrial area as having had the sharpest increases.
Source: company website
Cliffs Natural Resources also dipped today, slumping 2.4%, as the stock logged a fifth straight day of losses. The iron ore and coal miner chose to voluntarily delist itself from the Euronext Paris exchange, citing the costs associated with the listing as being uneconomical. It's a sad state of affairs when a company can't afford to list itself, though to be fair Euronext Paris doesn't add much liquidity that the NYSE can't provide. With Cliffs Natural currently one of the 5 most hated stocks in the S&P and GDP growth in China -- the world's largest purchaser of commodities -- slumping, the business has seen better days.
Lastly, shares of Transocean Ltd. slumped 2.2% Wednesday, as natural gas prices fell modestly. Transocean's stock reversed two days of gains today, pulling back after an upgrade sent the stock up more than 5% on Monday and Tuesday. The offshore contract driller is sensitive to swings in energy prices, as Transocean's services are naturally in higher demand when oil and gas prices are on the rise. Currently shelling out a 5.7% annual dividend, the stock naturally appeals to investors less focused on momentum and more interested in income-generating names.
