Considering the number of times they were warned it was coming, it’s surprising that investors acted — and traded — surprised when the Federal Reserve’s chairperson, Janet Yellen, confirmed . Yet, a bad day turned worse once that truth came out. The S&P 500 finished the day at 2,079.51, down 1.1%.
Leading the bearish charge were Kinder Morgan Inc (NYSE:KMI), Zafgen Inc (NASDAQ:ZFGN) and ArcelorMittal SA (NYSE:MT). Here’s what went wrong for each.
Kinder Morgan Inc (KMI)
If the name Kinder Morgan and the ticker KMI look oddly familiar, it may be because this oil and gas outfit appeared on Tuesday’s “Worst Three” list as well. With today’s 8% drubbing being even bigger than yesterday’s 5% meltdown, though, it has earned its place on this bearish roster again.
The overarching prod hasn’t changed. That is, Moody’s Investor Services has , which could eventually mean KMI ends up facing higher borrowing costs in the future, .
Fanning the bearish flames for KMI today was news that it would indeed owe $171 million for damages suffered by an El Paso Corp. affiliate’s shareholders stemming from an acquisition made last year. The plaintiffs claimed Kinder Morgan overpaid for the deal,
. The ruling puts that money back in their pockets, at the expense of Kinder Morgan.
Of course, the 3% plunge on oil prices certainly didn’t help matters on Wednesday. Amazingly enough, despite breathtakingly cheap gasoline and crude prices, .
ArcelorMittal SA (MT)
As weak as metal prices have become of late, and as much production capacity the likes of Alcoa Inc. (NYSE:AA) and Vale SA (NYSE:VALE) have already cut, the disparity between supply and demand may still not be met.
That reality haunted ArcelorMittal SA and MT shareholders today.
Citigroup gets the credit/blame for the bulk of the near-10% pullback from MT today, though falling commodity prices lent a bearish helping hand. Specifically, Citigroup announced it believes ArcelorMittal will further cut production in 2016. Subsequently, Citigroup lowered its rating on MT .
Zafgen Inc (ZFGN)
Last but not least, it’s not clear if it was the second death caused by Zafgen’s weight-loss drug beloranib that sent ZFGN stock careening today, or the fact that an army of lawyers were already prepping a class action suit against the company; perhaps it was a little of both. Either way, the damage done was devastating — ZFGN ended the session down by 61%.
Biotech company Zafgen was already on the hot seat concerning its , as the cause of an October death of one patient in the study was the same as the cause of the recent death … blood clots. Although , the circumstantial evidence is pretty damning as is.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
