Why did Altria Stock fall 4.8% on April 3rd?

FDA announcement

On April 3, the FDA announced that it was investigating reports that some people who use e-cigarettes have had convulsions after smoking. The FDA has received 35 reports that people, especially young adults, have had a seizure after using electronic cigarettes between 2010 and early 2019.

Although seizures or seizures are side effects of nicotine intoxication, the FDA has not found a direct relationship between the use of electronic cigarettes and seizures.

In a written statement, the FDA said: "We want to make it clear that we do not yet know if there is a direct relationship between the use of electronic cigarettes and the risk of seizure. We can not yet say with certainty that e-cigarettes are the cause of these crises. We share this information with the public because, as a public health agency, it is our responsibility to communicate on the potential safety issues badociated with regulated products that are the subject of a scientific investigation. It also helps to encourage the public to voluntarily report any additional adverse events that may better inform our work. "

Stock performance

The FDA announcement led to a fall in the share price of Altria (MO). On April 3, the company's share price fell to $ 53.43 before closing the day at $ 53.98, a 4.8% decrease from the closing price of $ 56.69 on April. On April 3, Philip Morris International (PM) and British American Tobacco (BTI) stock prices fell 2.5% and 2.8%, respectively.

Despite the fall of April 3, Altria has posted a cumulative return of 9.3% since the beginning of the year. During the same period, Philip Morris and British American Tobacco posted respective returns of 28.5% and 26.4%. Consumer Staples Select's SPDR ETF (XLP), which invests 8.7% of its holdings in companies in the cigarette and tobacco sectors, posted a return of 8.7%.