3M, UPS, Rockwell Automation Earnings Weigh on Industrials

(Bloomberg) -- Industrial stocks pared some of their worst losses Thursday to post their biggest one-day decline in a month after a string of weak results and dire warnings weighed on investor sentiment, and spread gloom across transports, autos and manufacturers.

The S&P 500 Industrials Sector Index fell 2 percent on Thursday, the biggest drop since March 22, after diversified manufacturer 3M Co. lowered its profit expectations, announced a job cut to combat poor results, flagged softness in the automotive and electronics markets, and warned of headwinds in China. Shares of 3M plummeted 13 percent in their biggest single-day loss since October 1987.

Some of that pessimism was echoed by Rockwell Automation Inc., which reported quarterly results below expectations, and said growth was tempered by weaker-than-expected automotive sales.

With U.S. automotive production slowing during the first three months of the year, along with a deceleration in China and Europe markets, analysts have already been warning about ugly results during the first-quarter earnings season. The warnings from 3M and Rockwell, along with weak showings from several auto suppliers, combined to contribute to the deepest plunge in the group since early December.

The Russell 3000 Auto Parts Index fell as much as 4 percent, the largest drop since Dec. 4, with Visteon Corp., Superior Industries International Inc., Tenneco Inc. and Cooper-Standard Holding leading the decline.

The biggest decliners on the broader S&P 500 Industrials Sector Index on Thursday included 3M, United Parcel Service Inc., Rockwell Automation and Wabtec Corp. UPS’s quarterly profit also disappointed, after snow storms and heavy flooding in the northern U.S. hampered operations.

While the transportation sector has been bracing for the impact from several severe weather events ranging from flooding to bomb cyclones, UPS’s results drove the point home for investors, with the Russell 3000 Truckers Index falling 3.1 percent. Biggest decliners included YRC Worldwide Inc., US Xpress Enterprises Inc., Saia Inc. and ArcBest Corp. UPS’s top rival FedEx Corp. shares also sank 4.7 percent.

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