Tuesday gave stock market investors continued gains from Monday's modest advance, as the Dow and S&P 500 both climbed nearly 1% on the day. Signs of potential stability in the energy market led many investors to conclude that one of the major drags on overall stock performance could finally dissipate.
SolarCity fell 7% as the company suffered a setback in its dispute with the Nevada Public Utilities Commission. The utility regulator unanimously voted to change the state's net metering laws in a way that the residential solar giant said would force it to stop offering its rooftop installations in Nevada.
Proponents of the change argue that SolarCity and other solar-power system installers are essentially profiting at the expense of existing electrical utilities, which have had to accept solar power at market prices while still bearing the expense of ensuring that customers have access to electricity on demand during times when solar power is unavailable. SolarCity stock soared after lawmakers got behind a renewal of tax credits favoring solar-power systems, but the pullback could become more pronounced if other states follow Nevada's lead on the net-metering issue.
Steelcase plunged 23% after the maker of office furniture reported its third-quarter earnings Monday afternoon. Steelcase said that pressure in the European market contributed to falling revenue during the quarter, and despite ongoing solid results in North and South America, it has seen order flows start to slow in the U.S. furniture industry.
If businesses keep cutting back on capital spending, it could be bad news for Steelcase, which relies on corporate investment in its products for its livelihood. Steelcase believes that its sales team can get better results in Europe, and that new products will gain traction with customers; but economic realities could nevertheless hold the company back at least in the short run.
Finally, Lannett declined 6%. Late Monday afternoon, the company commented on its recently completed acquisition of Kremers Urban Pharmaceuticals, saying that it expects to reap about $40 million from cost savings during its first 12 months as a combined company. Lannett has run into some troubles, as some previous Kremers customers had said that they would make plans to take their business elsewhere following the merger.
Management at Lannett has met with those customers, and worked to get back at least part of their business, but the lack of confidence is still somewhat disheartening for investors to see. Until the dust settles, Lannett shareholders will wonder whether the Kremers acquisition will give them everything they had hoped when the deal was first announced. If the combined company can't win back enough of its customers, then Lannett could face some troubles going forward.