The stock market lost ground on Tuesday, with the Dow Jones Industrials falling nearly 60 points and the S&P and Nasdaq posting similar declines. Investors are waiting anxiously to see whether anticipated new policies that President-elect Donald Trump has previously announced will actually become law in the near future, and others are nervous that potential political turmoil could hamstring the new administration's early efforts on some fronts. Moreover, some individual companies had bad news that contributed to a poor day for the market, and Arista Networks (NYSE:ANET), Progress Software (NASDAQ:PRGS), and Regions Financial (NYSE:RF) were among the biggest decliners of the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Arista gets bad news from a key court case
Arista Networks fell 12% after an adverse decision by the U.S. Customs and Border Protection agency. U.S. Customs said on Friday that it had granted a revocation request from Cisco Systems (NASDAQ:CSCO), with the effect of undoing a judgment back in November that had allowed Arista to continue importing products from abroad. Arista will still be able to fulfill U.S. orders from domestic manufacturers of its products, but others fear the decision could eventually create a supply bottleneck that could lead to customer discontent. Arista has said that it will fight the decision by responding to Cisco's allegations, but the only thing that's fairly certain is that the dispute is likely to last well into the future.
Progress reports a loss
Progress Software dropped 14% in the wake of its fiscal fourth-quarter earnings report late Monday. The application development specialist said it saw total revenue jump 4% on strength in software licenses, but a substantial $92 million goodwill impairment charge sent Progress to a $73.8 million loss, working out to $1.52 per share. On an adjusted basis, earnings of $0.62 per share were better than the consensus forecast, but Progress' guidance for revenue of $387 million to $395 million and adjusted earnings of $1.64 to $1.69 per share were below what investors had hoped to see. Progress hopes that its new strategic plan will generate long-term growth, using measures such as a streamlined operating approach, a new product strategy for development, and more efficient use of resources. Yet investors remain concerned that strong competition in the industry could weigh on Progress Software going forward.
Regions gives back some gains
Finally, Regions Financial declined 6%. The regional bank has performed extremely well recently, having posted gains of nearly 40% following the November election. Investors have gotten more optimistic about regional banks in general, and rising interest rates could lead to steeper yield curves that would be beneficial for Regions Financial and its peers. Yet shareholders seemed content to give back a small portion of those gains, given uncertainty about whether the best-case scenario for the bank will actually play out. Even with today's loss, Regions has seen its stock climb more than 70% over the past year, and favorable economic conditions could create even more growth in the future.