The stock market posted modest gains on Wednesday as investors looked forward to the May employment report and the possibility of a major shift in policy from the European Central Bank when it meets tomorrow. Even though trading was generally sluggish, the positive tone among market participants helped push major-market benchmarks slightly higher. Nevertheless, FuelCell Energy (NASDAQ:FCEL), Annie's (UNKNOWN:BNNY.DL), and JinkoSolar (NYSE:JKS) all fell substantially today.
FuelCell Energy dropped 8% after the fuel-cell power-plant specialist reported earnings last night that fell short of what investors had hoped to see. Losses for FuelCell Energy more than doubled from year-earlier levels, with revenue falling by almost 10%. Despite having made progress this year in completing the world's largest fuel-cell-driven energy production facility and winning minor contracts for more power plants, FuelCell Energy hasn't lived up to its full potential in the eyes of shareholders, who believe fuel cells have the capacity to be a much more important part of the electricity-generation industry. Although CEO Chip Bottone argued that future quarters will see greater sales, investors remain skeptical and appear to want to see actual results before buying into the bullish story for FuelCell Energy.
Annie's fell almost 8% as the natural-foods specialist faced more problems related to its accounting. After having announced that Annie's would have to pay greater than anticipated costs in order to fix what it called a "material weakness in our internal control over financial reporting" earlier this week, Annie's suffered the loss of its accounting firm, PricewaterhouseCoopers. PwC said that it would stay on to complete the filing of Annie's fiscal first-quarter financials as long as it could do so by August 11. Although Annie's has moved forward to find a new accounting firm, the negative publicity associated with any accounting-related problems could keep weighing on Annie's shares until those problems get resolved.
JinkoSolar posted a 7.5% decline on a horrible day for Chinese solar stocks generally, as the U.S. imposed new tariffs on Chinese producers of solar modules. JinkoSolar will be among the large group of Chinese solar stocks that have to pay almost 27% in tariffs, and the resulting rise in prices will make JinkoSolar and its Chinese peers less competitive as sources of solar modules for U.S. consumers. Given how strong the U.S. residential solar industry has been recently, the trade restrictions will undoubtedly hurt sales and give competitors outside China a leg up on JinkoSolar. Still, if China retaliates, it could cause problems for those competitors inside the emerging-market nation and give JinkoSolar a corresponding edge.