Friday was a sluggish end to the week on Wall Street as market participants seemed content to coast into the weekend. Major benchmarks were down small fractions of a percentage point from their Thursday closing levels, but the tug of war continued between optimistic and pessimistic investors. Many believe that a strong economy and the prospects for action on the political front in Washington could lift stocks still further, while more cynical investors point to general uncertainties as well as the fact that a major correction is long overdue. Poor news for some individual companies also weighed on the market, and Cummins (NYSE: CMI), Veritone (NASDAQ: VERI), and Sears Holdings (NASDAQ: SHLD) 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.
Cummins revs down
Shares of Cummins fell almost 5% after investors in the heavy-duty engine maker lost confidence in light of new competition. Tesla (NASDAQ: TSLA) revealed its electric semitractor-trailer model last night, and the move comes as a direct threat to Cummins and its fossil fuel-powered engine designs. Cummins has rebounded lately due to new strength in key sectors like mining, energy, and construction, and the company has been an innovator in areas like natural gas-powered engines. Yet although Tesla competition is still a long way away, the announcement got enough attention to make some question Cummins' long-term staying power.
Image source: Cummins.
Veritone raises cash
Veritone stock fell 9% in the wake of the company's pricing of a secondary offering. The cloud-based artificial intelligence (AI) analytics specialist said that it had priced a sale of 975,000 shares of stock at $23 per share, almost $4 less than where the company's shares closed on Thursday afternoon. Veritone said that it would use the roughly $22.4 million in proceeds from the sale as working capital and for other general corporate purposes. Key wins with important customers have helped raise awareness of Veritone lately, but the company still needs to find ways to expand its AI presence in order to stay ahead of competitors in the red-hot space.
Sears fails to inspire confidence heading into the holidays
Finally, shares of Sears Holdings declined another 7%. The beleaguered retailer announced particularly aggressive promotional discounts heading into Black Friday next week, raising new concerns about Sears' ability to produce strong sales and earnings results in the key holiday season. Analysts worry that even if Sears manages to bring customers into its doors, it won't actually make any significant amount of money from selling to them, and that could hasten the descent in Sears' financial condition. Given the number of challenges the retailer has faced, many think it's surprising that Sears had even made it this far without giving up the ghost.
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