Tuesday was a down day for stocks, with the Dow Jones Industrial Average falling early to triple-digit losses and other major benchmarks declining by a similar percentage. The yield on the 10-year Treasury jumped well above the 3% mark, leading to speculation that a sustained upward move for interest rates could start to sap away some of the strength of the nearly decadelong bull market in stocks. Adding to the downward pressure was badly received news from several prominent individual companies. Switch (NYSE:SWCH), Vipshop Holdings (NYSE:VIPS), and Agilent Technologies (NYSE:A) were among the worst performers on the day. Here's why they did so poorly.
Switch takes a tumble
Shares of Switch dropped 15% after the company reported first-quarter financial results. Revenue rose just 10% compared to the year-earlier quarter, and a more-than-80% drop in net income spooked some of those looking at the data-center infrastructure company's prospects for growth. CEO Rob Roy had good things to say about Switch's performance, noting that its efforts to expand its market over the long run appear to remain on course. Yet given how much competition there is among tech players trying to serve the rapidly evolving needs of enterprise clients, Switch will need to up its game in order to avoid falling behind and missing out on the big opportunity it has to serve strong demand for its data center services.
Vipshop gets discounted
Vipshop Holdings stock plunged 20% in the wake of the company's first-quarter financial report. The discount-apparel online retailer reported solid revenue gains of nearly 25%, but that marked continued deceleration in Vipshop's growth rate from past quarters. Adjusted net income fell from year-ago levels, suggesting that the e-commerce retail space in China is getting crowded enough to put pressure on margin levels even for large players in the industry. With a major partnership with other big players in the Chinese internet space having failed thus far to produce the reaccelerated growth that investors have wanted to see, Vipshop will have to look for other strategies to bolster revenue gains in order to give shareholders greater confidence going forward.
Agilent deals with disappointment
Finally, shares of Agilent Technologies fell almost 10%. The diagnostics and scientific solutions specialist seemed to post solid results in its fiscal second-quarter financial report, including a 9% rise in revenue and a 25% jump in net income compared to the previous year's period. CEO Mike McMullen praised Agilent's success in fulfilling its growth strategy, including good performance from the company's pharmaceutical customers, as well as the chemical and energy sector. Yet investors had wanted to see even better revenue gains given the upticks in the end markets of Agilent's key customer base. Unless more robust growth comes later in the fiscal year, Agilent could have trouble getting back to the levels it enjoyed earlier in 2018.