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Why National Oilwell Varco, Anthem, and Petroleo Brasileiro Slumped Today

Dan Caplinger, The Motley Fool

Wall Street finished the week well, with major indexes closing as much as 1% higher on Friday. A combination of merger and acquisition activity and strong quarterly reports helped bolster confidence among investors, as many had entered earnings season thinking that the news would inevitably be bad. Yet despite solid gains for much of the market, some companies faced stresses that kept their stocks from participating in the rally. National Oilwell Varco (NYSE: NOV), Anthem (NYSE: ANTM), and Petroleo Brasileiro (NYSE: PBR) were among the worst performers. Here's why they did so poorly.

Poor outlook hurts Varco

Shares of National Oilwell Varco dropped more than 8% after the energy equipment and services provider gave its operational update for the first quarter. Varco said that revenue will likely come in weaker than expected, as CEO Clay Williams blamed the plunge in oil prices in the last part of 2018 for weaker demand that persisted into the new year. Williams is optimistic that the rebound in oil prices should translate into better order volume over the long run, but shareholders seem to think that a full recovery could take longer than many have hoped. Investors will have to wait for Varco's full results on April 26 before having the entire picture on how the oil-field services specialist did to start 2019.

Complex of several pipelines in parallel, supported by metal framework.

Image source: National Oilwell Varco.

Anthem deals with the threat of more regulation

Anthem's stock fell 8.5% following additional concerns for healthcare stocks about the possible future of regulation and insurance coverage for the industry. Bipartisan efforts in Congress have centered on prescription drug pricing and the interaction between pharmaceutical companies, drug distribution specialists, drugstore retailers, and consumers, and some presidential candidates are looking at expanding Medicare coverage in a way that could jeopardize sources of business for Anthem and some of its peers. It's far too early for investors to get imminently concerned, but after having seen outstanding performance in 2017 and 2018, Anthem's stock has given back a significant part of its gains.

Political worries hit Petrobras

Finally, shares of Petroleo Brasileiro sank 9%. The Brazilian oil giant fell on comments from Brazilian President Jair Bolsonaro asking for diesel fuel prices to take into consideration the needs of truckers. In response, Petrobras canceled an expected price boost of nearly 6% for diesel. Investors had been optimistic about Petrobras' potential under the Bolsonaro government because the new president is seen as favoring business. Yet the interaction between Brazil's government and Petrobras has been complicated over the years, and investors today don't seem entirely comfortable with how a policy decision translated into a profit-sapping price cut.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of National Oilwell Varco. The Motley Fool has a disclosure policy.