HOUSTON (ICIS)--Chemical shares listed on US stock exchanges fell sharply on Wednesday as the Dow Jones Industrial Average dropped by over 3% or over 800 points.
The index closed at 25,598.74, down 831.83 points or 3.15%. The S&P 500 fell by nearly 95 points. The NASDAQ Composite fell by 4.08%.
The Dow Jones US Chemicals Index closed at 615.52, down by 15.61 points or 2.47%.
The decline followed announcements from two chemical companies that warned about their upcoming earnings, citing trends that could affect other companies with US-listed shares.
On Monday, US paints and coatings company PPG said its adjusted earnings/share to fall year on year because of higher costs for raw materials and logistics.
In addition, overall demand in China has softened, the company said.
Several of PPG's US and European customers are carrying high levels of inventory as a result of lower demand. This is causing weaker automotive-refinish sales, PPG said.
Exchange rates around the world weakened, mainly in emerging economies, and that caused income to fall, the company said.
After PPG's announcement, US-based styrenics producer Trinseo warned that its third-quarter earnings will be below its earlier guidance, because of higher raw-material costs, lower automobile production and uncertainty in China because of ongoing trade negotiations. Trinseo also cited continued weakness in the tyre market.
Both Trinseo and PPG cited higher raw-material costs, and this could weigh on other companies' results during the earnings season.
Unfavourable exchange rates could also drag down earnings, as they did in 2015-2016. US stock markets had two corrections during those years, in which indices fell by more than 10% from their previous highs.
Not all of the companies followed by ICIS fell. US-based pigment producer Tronox was the biggest winner, rising by 5.95%. Other companies that make titanium dioxide (TiO2) also rose as well as several paints and coatings companies.
These increases followed a filing on Tuesday by the activist investor firm Trian, which disclosed a stake in PPG.
Outside of these paint-exposed companies, every US-listed company followed by ICIS fell.
Trinseo fell the most, by nearly 21%, following its after-hours announcement on Tuesday about its earnings.
Pine-chemicals producer Ingevity was the second biggest loser, falling by 8.02%.
The table below shows the performance of the US-listed companies followed by ICIS.
|$ Change||% Change|
|Venator Materials PLC||8.96||0.35||4.01|
|Kronos Worldwide Inc||15.89||0.29||1.86|
|RPM International Inc||59.92||0.68||1.15|
|Axalta Coating Systems Ltd||26.85||0.27||1.02|
|PPG Industries Inc||99.51||0.95||0.96|
|The Chemours Co||35.72||0.2||0.56|
|Westlake Chemical Corp||80.46||-0.16||-0.2|
|Westlake Chemical Partners LP||24||-0.29||-1.2|
|DCP Midstream LP||43.04||-0.55||-1.26|
|Alerian MLP ETF||10.74||-0.2||-1.78|
|PBF Energy Inc Class A||50.95||-1.03||-1.98|
|LyondellBasell Industries NV||97.66||-2.05||-2.06|
|Exxon Mobil Corp||84.59||-1.92||-2.22|
|The Mosaic Co||32.28||-0.82||-2.48|
|Enterprise Products Partners LP||28.59||-0.74||-2.52|
|Eastman Chemical Co||84.46||-2.35||-2.71|
|Braskem SA ADR repr Class A||28.35||-0.82||-2.81|
|H.B. Fuller Co||47.23||-1.56||-3.2|
|Marathon Petroleum Corp||81.02||-2.74||-3.27|
|Ashland Global Holdings Inc||77.11||-2.62||-3.29|
|Calumet Specialty Products Partners LP||6||-0.23||-3.69|
|Ecopetrol SA ADR||25.74||-1||-3.74|
|W R Grace & Co||68.29||-2.65||-3.74|
|Valero Energy Corp||111.02||-4.64||-4.01|
|Sociedad Quimica Y Minera De Chile SA ADR||42.84||-1.88||-4.2|
|Platform Specialty Products Corp||11.06||-0.6||-5.11|
|Occidental Petroleum Corp||77.93||-4.3||-5.23|
|Petroleo Brasileiro SA Petrobras ADR||15.14||-0.95||-5.88|
|Ultrapar Participacoes SA ADR||11.03||-0.69||-5.89|
|PQ Group Holdings Inc||15.56||-1.25||-7.44|
|CF Industries Holdings Inc||50.6||-4.22||-7.69|
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