Friday was a good day on Wall Street, with the Dow Jones Industrial Average once again climbing triple digits and other major benchmarks following suit with similar-sized percentage gains. The U.S. economy continued to move forward last month, and the latest jobs numbers from the Bureau of Labor Statistics showed ongoing progress in creating new positions and reducing unemployment rates. Yet some stocks weren't able to join in the celebration that accompanied the strong economic report. Petroleo Brasileiro (NYSE: PBR) , Golar LNG Partners (NASDAQ: GMLP) , and Abercrombie & Fitch (NYSE: ANF) were among the worst performers on the day. Here's why they did so poorly.
Petrobras deals with a departure
Shares of Petroleo Brasileiro plunged nearly 15% as the Brazilian state-controlled oil giant dealt with the sudden resignation of its chief executive officer. CEO Pedro Parente's departure comes after a long strike by Brazilian truckers, who were upset about a sudden rise in diesel fuel prices within the South American nation. Historically, Brazil has had more vigorous price controls that have often led to energy products being available at below global market costs, but Parente had supported a more market-based approach. Now, shareholders fear that government policy could once again hold back Petrobras from maximizing its potential to generate revenue and profit in the face of rising crude prices.
Image source: Petrobras.
Golar keeps falling
Golar LNG Partners units dropped 10%, adding to losses from Thursday following bad news in the company's fiscal first-quarter financial report. The liquefied natural gas (LNG) shipping master limited partnership said that it had low charter rates and utilization levels for its key LNG shipping vessels, leading to cash flow that was less than a third of what the MLP paid out in distributions. In addition, Golar announced that its joint venture partner, Schlumberger , had decided to withdraw from the business, putting its future viability in peril. Until Golar finds another source of funding, the MLP could see further unit-price declines.
Abercrombie deals with higher costs
Finally, shares of Abercrombie & Fitch fell 9% . The teen and young-adult apparel retailer reported better revenue gains than most shareholders had expected, with solid gains in same-store sales at both its Abercrombie and Hollister chains. Abercrombie's losses also weren't quite as extensive as feared. Yet forward-looking projections weren't quite as optimistic, including revenue gains in the low-single-digit percentages, and an expected jump in operating costs could put pressure on Abercrombie's efforts to get itself to breakeven. With retailers in general still facing pressure, Abercrombie isn't in the best position to deal with company-specific operational issues as well.
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