Colorado stocks scratch out modest gains in 3Q
U.S. stock indices managed to notch modest gains in the third quarter despite a slew of bad news.
The S&P 500 and Dow Jones industrial average both rose 1.19% from July to September. And the Bloomberg Colorado index, a basket of companies based in the state, wasn’t far behind with a gain of 1.14%.
“Stocks have been climbing a steep wall of endless worry,” said Fred Taylor, president of Northstar Investment Advisors, a Denver money management firm.
For those looking to sell, there was no shortage of negative headlines, he said. The trade war between the U.S. and China intensified, drone attacks on Saudi oil facilities took out 5% of global production, a hard Brexit became more likely and Germany slipped into recession.
And as September came to an end, Congress was moving quickly to impeach President Donald Trump.
But investors were buoyed by two Federal Reserve interest rate cuts, low unemployment and the ability of American consumers to keep spending, Taylor said.
Colorado’s top-performing stock belonged to Gevo, a Douglas County maker of biofuels, which saw its shares shoot up 70% on news of advances in its low-carbon aviation fuel.
Shares of Crocs, the Niwot-based maker of footwear, were down 24% in the first half of the year. In August, The Wall Street Journal’s “Heard on the Street” column gave a shout out, noting that “ugly was the new cool.” That helped push Crocs’ shares up 40.6% during the quarter.
Other top performers included shares of Denver education firm Aspen Group, up 36.6%; Denver homebuilder MDC Holdings, up 31.5%; and Ampio Pharmaceuticals up 29.2%.
Two Boulder biotech firms developing cancer drugs had the biggest percentage declines in the quarter among Colorado’s public companies. Clovis Oncology shares cratered 73.6%, while those of Miragen Therapeutics dropped 64.3%.
Wall Street has increasingly turned hostile toward oil and gas producers who spend more than the cash they generate. Whiting Petroleum shares dropped 57% during the quarter, while those of QEP Resources had a 48.8% decline and shares of Antero Resources fell 45.4%.
Taylor said what is revealed in the thirdquarter earnings reports coming out soon will help drive the markets up or down through the remainder of the year.