Wall Street had another turbulent day on Friday, and although most major benchmarks managed to finish the day higher, the gains didn't come without drama. Early in the day, stocks plunged on what market participants saw as provocative comments about trade and tariffs from the White House. Only later did investors seem to discount the idea of an all-out trade war, focusing instead on some positive reports from companies discussing their earnings. Yet some stocks fell on bad news, and McDonald's (MCD 1.70%), Vista Outdoor (VSTO -0.59%), and J.C. Penney (JCPN.Q) were among the worst performers on the day. Here's why they did so poorly.
McDonald's looks less golden
Shares of McDonald's fell almost 5%, contributing substantially to the drop in the Dow Jones Industrials in the wake of negative comments from stock analysts. Stock watchers at RBC Capital cut their price target on McDonald's by $20 to $170 per share, citing poor conditions in the fast-food industry along with particularly weak interest in the company's new value menu lineup. RBC analysts kept their outperform rating unchanged, with hopes that seasonal factors will boost McDonald's later in the year. Even with the downbeat assessment, other investors are pleased with improving numbers for McDonald's in its most recent earnings report, and further positive momentum could easily reverse this decline in short order.
Image source: McDonald's.
Vista sees customers dwindle
Vista Outdoor stock declined 7% after co-op retailer Recreational Equipment Inc. put a hold on orders from the maker of guns and outdoor products. The move is just the latest in a series of reassessments of relationships between retailers of sporting goods and gun manufacturers, but the REI news made it clear that Vista's efforts to diversify product offerings with items like Camelbak hydration systems and Giro cycling gear won't necessary protect the gun maker from consumer backlash. Vista is feeling more pressure to respond to gun violence proactively rather than simply reacting to any legislative efforts that might come in the future, and a series of moves among retailers to boost the minimum age to purchase weapons to 21 could be just the beginning if Vista and its peers can't come up with solutions of their own.
Penney can't convince investors
Finally, shares of J.C. Penney dropped 5%. The department store retailer reported fiscal fourth-quarter financial results that included a 2.6% gain in comparable-store sales, helping J.C. Penney to achieve the slightest of positive comps for the full fiscal year. Yet although some investors celebrated the idea that the retailer could be gaining momentum, guidance for comps growth of just 0% to 2% for fiscal 2018 didn't seem to sustain the upward movement that investors had hoped to see from the company. Despite impressive efforts thus far, J.C. Penney needs to do more if it wants to mount a full recovery from the difficult situation it has struggled through over the past several years.
