Global Fastener News

Nearly 800-Point Market Plunge Drops Q3 FINdex 9.9%

Jason Sandefur

The economic meltdown on Wall Street took public companies with fastener businesses for a ride.

Many companies tracked by FIN saw their share value drop during a record market slide on Monday, September 29, 2008, when the Dow plunged 777 points to 10,365. The markets plummeted after the U.S. House of Representatives rejected a massive bailout bill hammered out over the weekend.

Dorman Products saw its shares drop 19.7% to $10.93 on September 29, the single largest percentage of stock value loss suffered by public fastener companies. Other fastener companies with double-digit share losses on Sept. 29 included Park-Ohio (17.1%), Nucor (16.6%), B/E Aerospace (13.4%), Lawson Products (12%), and Carpenter Technologies (11.5%).

For the third quarter, FIN Fastener Stock Index matched the markets during a tumultuous third quarter that prompted a government showdown over a $700 billion bailout plan for Wall Street.

Both the FINdex and a composite index of related industrial stocks dropped an identical 9.9% during Q3.

Nucor recorded the largest percentage decline during the period, with its stock plummeting 47% to $39.50. Analysts warned that steel companies could see demand drop as consumer spending decreases.

Carpenter Technologies recorded a 41% drop in share value to $25.65 during Q3. Other fastener companies with double-digit losses during the period included Alcoa (36%), B/E Aerospace (32%), Precision Castparts (18%), Kaydon (12%), Barnes (12) and Danaher (10%).

Dorman Products led public fastener companies whose share value grew during Q3. Other companies with stock increases of 10% or more during the period included Park-Ohio (21%), Simpson Mfg. (14%), Fastenal (14%) and Lawson (11.5%).

There is some evidence that market upheaval is spilling over into other facets of the fastener industry.

Aerospace manufacturer Heartland Precision Fasteners Inc. of New Century, KS, shelved plans to add a $1.5 million extension to its factory, which produces more than 300,000 fasteners a day and employs 80 people.

“All of this is making us think twice; this is a big investment for us,” said Heartland president David Rose told the Wall Street Journal. “”So I guess that means I’m doing my part to make sure it all fails, by not spending anything.”

And Taiwanese fastener suppliers have stepped up exploration of such emerging markets as Latin America in the wake of the financial crisis, fearing a crippled U.S. market. �2008 FastenerNews.com