Tuesday was another positive day for most of the stock market, although certain segments did better than others. Among major benchmarks, the Dow performed the best, with triple-digit gains taking the average to another record high. The S&P 500 saw less robust gains, and the Nasdaq Composite actually lost ground on weakness in some major technology stocks. Overall, though, investor sentiment seemed relatively positive, with many looking for a rate hike from the Federal Reserve tomorrow but still thinking that the economy can sustain future growth. Still, bad news from Mattel (NASDAQ:MAT), Iron Mountain (NYSE:IRM), and J.C. Penney (NYSE:JCP) put those stocks among the worst performers on the day. Below, we'll look more closely to tell you why they did so poorly.

Mattel expects a tough holiday season

Shares of Mattel dropped 5% after the toymaker said that it believes that its holiday sales will be weak. Key brands like Barbie and Fisher-Price are seeing stronger competition, and toy retailers are being more conservative about stocking large inventories of Mattel toys. The news followed moves from bond rating agency Moody's to cut its ratings on Mattel bonds to Ba3 from Baa3, removing its former investment-grade status and turning the toymaker's existing debt into junk bonds. Mattel has already made aggressive moves to survive in a tough industry environment, but investors increasingly fear that those moves might prove insufficient to save the company in the long run.

Box for Thomas and Friends Twist-N-Turn Stunt Set from Fisher-Price.

Image source: Mattel.

Iron Mountain makes a big buy

Iron Mountain stock fell 7% in the wake of the storage and information management company's decision to make a sizable acquisition. The company announced it would pay $1.3 billion to buy IO Data Centers, a Phoenix-based co-location data center services specialist. Proponents of the acquisition argue that the deal will help accelerate Iron Mountain's attempt to focus on faster-growing business segments. Yet Iron Mountain said it would do a secondary offering of 14.5 million shares of stock as well as selling $825 million in 10-year notes to raise cash for the acquisition. That resulted in a credit outlook shift from Moody's to negative, and with a considerable debt load already along with high expectations from dividend investors, Iron Mountain can't afford bad news on that front.

J.C. Penney sees loss of confidence

Finally, shares of J.C. Penney declined more than 10%. Some investors had recently started to think that the discount big-box retailer might finally be turning the corner toward a recovery, pointing to better financial results in the third quarter and signs of less dramatic promotional activity during the key Thanksgiving holiday weekend. Yet today's share-price move reflected apparent doubts from some investors watching the retailer's stock that Penney will be able to see a full rebound this holiday season. With just a couple weeks left in the season, investors will get their answer one way or the other in January when Penney reports its official results.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.