Black & Decker Corp., which has been a darling of Wall Street for the last year, saw its shares fall 5.4 percent yesterday in extremely heavy trading, after other consumer products companies warned of sales slowdowns.
Black & Decker hasn't made sales projections and didn't return calls asking for comment on yesterday's stock action.
More than 2.3 million shares of the Towson-based power tool maker changed hands in New York Stock Exchange trading yesterday, the stock's biggest volume in 2 1/2 years. After dropping as low as $27.50 in the first hour of trading, Black & Decker stock rebounded somewhat and finished the day down $1.625 at $28.25.
Wall Street analysts said they believe investors overreacted to recent reports from Sunbeam Corp. and Stanley Works that their sales of tools and household goods were flagging.
Russell L. Leavitt, who follows consumer products companies for Salomon Bros. in New York, said he believes Black & Decker is protected against downturns in the U.S. consumer market by its diversification into other countries and into other sectors of the economy at home.
Although the stock has been very strong for the last year -- nearly doubling from last July to its 52-week high of $33 on June 1 -- Mr. Leavitt continues to recommend the stock to his clients. "I think it is going to go higher," he said.