Why Facebook, Applied Optoelectronics, and Peabody Energy Slumped Today

The stock market didn't have any major movements on Friday, as investors seemed content to coast after extremely sharp gains over the summer led to the market's best quarter since late 2013. Economic growth remains strong despite repeated moves from the Federal Reserve to raise interest rates, and although major overhangs like the midterm elections and trade disputes across the globe remain important, they haven't yet caused any apparent fear in market participants. Some stocks did lose ground on the last day of the third quarter, and Facebook (NASDAQ: FB), Applied Optoelectronics (NASDAQ: AAOI), and Peabody Energy (NYSE: BTU) were among the worst performers. Here's why they did so poorly.

Facebook deals with a major data breach

Shares of Facebook fell almost 3% after the social media giant announced a security breach that could affect 50 million of its users. The company said that attackers were able to break into user accounts by taking advantage of flaws in the way that Facebook detects whether a user is still logged in on a certain device, letting them use digital keys to gain access. A spokesperson said that Facebook hasn't yet determined whether the affected users were specifically targeted or if it was a broad-based attack, and the company has taken steps to address the problem. Yet with the social media company under scrutiny from Washington more broadly, the episode was particularly ill-timed for Facebook.

Applied Optoelectronics keeps falling

Applied Optoelectronics dropped 13%, adding to Thursday's losses as the fiber-optic networking specialist's stock reacted to negative comments from analysts. Loop Capital Markets cut its rating on the stock from hold to sell and slashed its price target by more than half to just $20 per share, citing quality-control concerns and a weaker pricing environment. Today, two more analysts weighed in, with Piper Jaffray reducing its price target from $43 to $29 per share. Raymond James cut its rating from strong buy to outperform, although its $40 price target is still well above the current share price. Until the impact of tariffs and changing industry conditions is clearer, Applied Optoelectronics could continue to be volatile.

Peabody deals with difficulties

Finally, shares of Peabody Energy lost 13.5%. The coal company suffered from two downgrades by analysts at Seaport Global and Clarksons Platou, in both cases moving from buy to neutral. The moves came amid reports indicating a fire in a portion of its Goonyella Mine in Queensland, Australia, with Peabody saying that all mine employees were outside of a specified exclusionary zone at the time of the incident. The coal company isn't sure what impact the problem will have on future quarters, but for now, other mines should be productive enough to meet Peabody's current guidance on full-year sales volume. Even so, the news is far from welcome just a year and half after the company emerged from bankruptcy protection.

Offer from The Motley Fool: The 10 best stocks to buy nowMotley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has tripled the S&P 500!*

Tom and David just revealed their ten top stock picks for investors to buy right now.

Click here to get access to the full list!

*Stock Advisor returns as of Aug. 6, 2018.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.