Why Sears Holdings, Barrick Gold, and Ryder System Slumped Today

By Dan Caplinger Markets Fool.com

Tuesday was another strong day for the stock market, and both the Nasdaq Composite and Dow Jones Industrials climbed above key milestones to re-establish the bullish tone among investors. Impressive earnings reports from key stocks in several different sectors of the economy helped build on the momentum that Monday's geopolitically spurred rally created, and market participants now seem to believe that the 8-year-old bull market could still have legs to run a lot further to the upside.

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Yet not every stock benefited from the positive tone on Wall Street today, and Sears Holdings (NASDAQ: SHLD), Barrick Gold (NYSE: ABX), and Ryder System (NYSE: R) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Sears keeps taking hits

Shares of Sears Holdings fell another 9%, compounding losses that have cut about 20% off the stock's value over the past week. New concerns have surfaced about the retailer's ability to continue maintaining its debt, especially in light of the long series of asset sales that Sears has already made. With the company having said that its comparable-store sales fell by double-digit percentages during the first quarter and that it expects to continue posting operating losses, investors were ill-prepared to suffer the additional shock of seeing its chief financial officer depart. Sears is desperately working to reduce its ongoing costs, and it has made some progress on that front. But it's still unclear to many how the ailing retailer can recover from industry conditions that have put even much stronger competitors in jeopardy.

Image source: Sears Holdings.

Barrick gets tarnished on weaker outlook

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Barrick Gold stock dropped 11% in the wake of the company's first-quarter financial report. The gold mining giant said late Monday that it reversed a year-ago loss with adjusted earnings of $0.14 per share, and revenue rose by about 3% to $1.99 billion. Yet costs soared in comparison to what Barrick paid during the first quarter of 2016, with all-in sustaining costs rising $66 to $772 per ounce and costs of sales climbing $23 per ounce to $833. Moreover, Barrick said that it now expects full-year gold production of just 5.3 million to 5.6 million ounces, down 300,000 ounces from its previous guidance. Much of this reduction will stem from the sale of a 50% interest in the Veladero mine in Argentina, for which Barrick received $960 million from China's Shandong Gold. With the stock market rallying, gold markets were weak, and the prospects for continued strength in the broader economy has many gold investors thinking that Barrick and other gold miners are likely to underperform at least in the short run.

Ryder breaks down

Finally, shares of Ryder System finished down 14%. The commercial fleet management specialist said that despite reporting record revenue in the first quarter, adjusted earnings fell by more than a quarter from year-ago levels. A significant portion of sales gains came from higher fuel costs that Ryder passed through to its customers, and the company's results were at the low end of the range that it had previously forecast. CEO Robert Sanchez cited weak rental demand, a sluggish freight environment, and used vehicle sales that were less than the company had expected. In response, Ryder cut its full-year 2017 earnings outlook, and although it thinks commercial rental demand will pick up due to seasonal factors, it won't be enough to sustain the company's previous expectations for the year. For now, Ryder seems content to hope that greater flexibility will help it capitalize on opportunities more effectively in 2018.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.