Stocks got off to a bearish start on Tuesday in the wake of news that Turkey had shot down a Russian military jet. And, not surprisingly weak consumer confidence data didn’t offer any real inspiration either. By the time the closing bell rang, though, the bulls had managed to reclaim that lost ground, and then some. The S&P 500 finished the session up 0.12%, at 2,089.14.
Not every stock managed to turn things around on Tuesday, however. Brocade Communications Systems, Inc. (NASDAQ:BRCD), Aduro BioTech Inc (NASDAQ:ADRO) and Delta Air Lines, Inc. (NYSE:DAL) all finished the session deep in the red. Here’s what happened.
Delta Air Lines, Inc. (DAL)
Just when it appeared the public was getting over their travel fears in the wake of the Paris bombings a couple of weeks ago, those fears were renewed — perhaps even topped — today following news that Turkey shot a Russian fighter jet out of the sky.
Not quite knowing if this was a prelude to an expansion of the military conflict already underway in the region, investors weren’t taking any chances. Fearing the possibility that travel would be stymied by threats of violence, the market firmly dumped travel-related stocks like Royal Caribbean Cruises Ltd (NYSE:RCL) and Expedia Inc. (NASDAQ:EXPE).
Leading the charge lower, however, was Delta Air Lines … arguably the U.S. name most vulnerable to more military conflict. DAL fell 3% in response to news.
Brocade Communications Systems, Inc. (BRCD)
Brocade Communications Systems reminded traders today that third quarter’s earnings season isn’t quite over yet. And, BRCD shareholders paid the price, with the stock falling nearly 8% after the networking equipment maker posted results that topped estimates but served up an outlook that failed to satisfy.
Last quarter — fiscal Q4 — Brocade earned 26 cents per share on revenue of $588.8 million. The pros were only looking for a profit of 24 cents per share of BRCD and sales of $574.7 million.
The outlook for the current quarter fell well short of estimates, though. Brocade is expecting revenue for the current quarter to roll in between $550 and $570 million, with earnings per share of BRCD likely to range between 23 and 25 cents. Analysts were expecting a bottom line of 27 cents on a top line of $583 million.
Aduro BioTech Inc (ADRO)
Last but not least, Aduro BioTech may have topped last quarter’s estimates, but news that one of its key in-development drugs poses an unexpected risk kicked the legs out from underneath ADRO shares.
The good news: Last quarter, Aduro BioTech earned one cent per share on sales of $19.1 million. Both were much better than the expected loss of eight cents per share of ADRO and revenue of $16.9 million.
The bad news: Pancreatic cancer drug CRS-207 — a form of inert listeria bacteria delivers a cancer-fighting drug in a way a cancerous cell isn’t prepared to defend against — may have caused a case of listeriosis. The exact cause isn’t clear, but it looks as if the drug-delivery means itself could be a culprit, which may well send the phase 2b drug back to the proverbial drawing board.
ADRO closed 16% lower on the news.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
