: 3M stock leads the Dow’s losers after S&P cuts credit rating, to 3 notches above ‘junk’ status
Shares of 3M Co. MMM slid 1.5% in morning trading Wednesday, enough to pace the Dow Jones Industrial Average’s DJIA decliners, after S&P Global Ratings downgraded the the consumer, industrial and health care-products company’s credit following the company’s agreement to pay up to $6 billion to settle litigation over its Combat Arms earplugs. S&P cut 3M’s credit to a BBB+ rating, which leaves it just three notches above speculative grade, or “junk”, territory. The rating outlook remains negative. S&P said that while the settlement is “very reasonable” and provides a “degree of clarity,” it increases adjusted debt by about $4 billion. Meanwhile, Moody’s Investors Service said that while the Combat Arms settlement was “credit negative,” the terms were “less onerous” than expected and reduce uncertainty. As a result, Moody’s kept 3M’s credit rating at A2, which is five notches above junk status, but left the outlook at negative. The stock had gained 1.4% on Tuesday following the Combat Arms settlement announcement, after surging 5.2% on Monday amid reports that a settlement was coming. The stock has shed 13.3% year to date while the Dow has tacked on 5.2%.
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