Image source: U.S. Steel.
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Friday brought an end to the record run for the broader stock market, although the Nasdaq benchmark managed to post a new all-time high. The Dow and S&P 500 eased downward by small fractions of a percentage point, responding to government releases of economic data that showed unexpected weakness in certain areas of the U.S. economy. A drop in the Producer Price Index pointed toward a lack of inflationary pressure domestically, and flat retail sales dispelled any concerns that the economy might be on pace to overheat in the near future.
Even with Federal Reserve interest rate increases seemingly off the table, however, investors seemed content to coast into the weekend and hold onto the lion's share of their gains for the week. That didn't stop some individual stocks from falling, and U.S. Steel (NYSE: X), Noble (NYSE: NE), and Vivint Solar (NYSE: VSLR) were among the poorer performers in the market today.
U.S. Steel can't harden up
U.S. Steel fell 7%, adding to substantial losses from earlier in the week. The steel producer began falling on Wednesday after announcing that it had priced an offering of common stock at levels far below where the stock then traded.
Prior to Tuesday's offering, the stock had closed on Monday at nearly $26 per share, but the company was only able to get investors to pay $23 per share for the 17 million shares it offered. That helped spur a 6% decline in the stock on Tuesday, and further declines Wednesday and Thursday brought the stock's weekly performance down to a loss of more than a fifth of its value. Even with the losses, U.S. Steel has still rebounded sharply since the end of June, but shareholders will want to see the company take action to make sure it doesn't end up giving back all of its gains in the days and weeks to come.
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Noble can't get any love
Noble fell 7% after another analyst jumped on the bandwagon to downgrade the stock. Professionals at RBC have sought to figure out whether offshore drilling companies like Noble are finally getting cheap enough to justify a purchase from bargain-hunting investors; but at least for now, the analysts believe that it's too early to jump in. As a result, they cut their price target on Noble by nearly 30%, to $8 per share.
At this point, there's still a glut of new drilling equipment in the pipeline, and that could prevent Noble and its peers from recovering as quickly as they otherwise would. With oil prices still locked well below the $50-per-barrel level, there isn't likely going to be a rush to restart offshore drilling projects at past levels of activity anytime in the near future.
Vivint Solar gets eclipsed
Finally, Vivint Solar eased downward by 4%. Investors in the solar-installation specialist were troubled by news from rival Sunrun, which said that it had achieved greater installation volumes of solar projects than investors had expected.
One potential wildcard for Vivint involves its lawsuit against SunEdison, which might now have an opportunity to go to trial. Nevertheless, for long-term investors who are more interested in Vivint's fundamental business prospects, the need to take advantage of more competitive cost structures than Sunrun is greater than ever. Unless it can start executing better, Vivint shareholders might never get their day in the sun.
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