Boeing has done it – now the industrial and consumer products group, 3M has also done it – crash the Dow while the rest of the markets edge higher.
Twice big falls in the price of Boeing shares over the dodgy 737 Maxx plane crashes and problems have held back or dragged the Dow lower while the S&P 500 and Nasdaq rose.
Overnight Thursday a shockingly weak quarterly report from 3M – completely unexpected and not forecast by any analyst – helped push the Dow down by more than 134 points.
3M shares fell nearly 12% in early trading in the wake of the weak quarterly report, then lost more ground later in the day after the analysts briefing failed to convince investors that the company was on top of its problems.
In fact the 12.9% plus fall was the biggest for the shares since the 26% slide on Black Monday 1987 and surpassed the slide in the GFC.
Analysts said the drop accounted for more than 80 points of the Dow’s 134 point fall. The Dow was down half a per cent or 133.97 points. The S&P 500 fell at the end to close down 0.04% and Nasdaq finished in the green – up 0.21%.
3M reported that it had missed profit and revenue expectations for the quarter, slashed its full-year outlook, and said it was cutting 2,000 jobs around the world to save $US225 million a year in costs. Revenues fell 5% to $US7.86 billion from $US8.28 billion,
The weak performance was made to look even poorer with analysts now seeing a reversal of earlier gloom about the March quarter reporting season and expectations of a slide in earnings.
Now analysts are looking to a rise – modest – but a small gain as the overwhelming majority of reporting companies are doing better than expected.
3M management admitted that what made March quarter figures even worse was that the company was too slow to fast enough to the weakness, particularly in its industrial businesses in Asia (and especially China) and the US.
3M’s selloff comes just two days after the stock had closed at a one-year high of $US219.50. they ended at $US190.73
