Thursday was a relatively quiet day on Wall Street, and action in different parts of the market showed mixed signals for investors. On one hand, small-cap stocks moved higher, with key benchmarks in that area hitting record highs. Yet the better-known large-cap stock indexes like the S&P 500 gave up early gains. Looking more closely at individual stocks, some companies suffered from bad news that sent their shares falling. J.C. Penney (OTC:JCPN.Q), NetEase (NASDAQ:NTES), and Jounce Therapeutics (NASDAQ:JNCE) were among the worst performers on the day. Here's why they did so poorly.

J.C. Penney can't keep up

Shares of J.C. Penney dropped 12%, disappointing investors who had hoped that the discount department store chain would be able to match solid performance from a key industry peer yesterday. Penney suffered a 4% drop in revenue during its first quarter, and even though that came from the closing of almost 140 locations last year, comparable-store sales gains amounted to just 0.2%. Penney's bottom line swung to a loss on an adjusted basis, due largely to weak margin figures. CEO Marvin Ellison blamed unseasonably cold weather in the early spring for the shortfall, as it left shoppers unmotivated to get a jump on warmer-weather spring and summer fashions. With Penney having cut its guidance on earnings for the full year, investors have to worry about another shoe dropping later in 2018.

J.C. Penney location with outside entrance, shown without customer traffic.

Image source: J.C. Penney.

Game over for NetEase's growth?

NetEase stock sank over 7% after the company reported first-quarter financial results. Revenue growth for the Chinese video game and e-commerce giant slowed to just 4%, and big boosts in spending sent adjusted net income down 70% compared to the year-earlier quarter. Most of the weakness came from NetEase's core video game segment, where some of the company's self-developed games didn't perform up to expectations. E-commerce efforts continued to go well, but even though that portion of the business is growing, it's not big enough to overcome challenges with the game division. Until NetEase can demonstrate that it can compete in an increasingly tough environment in China, investors could remain nervous about its prospects.

Jounce gets jounced

Finally, shares of Jounce Therapeutics plunged 35%. The clinical-stage immunotherapy specialist suffered a double whammy, presenting data that wasn't as upbeat as hoped and also receiving an analyst downgrade. Jounce's phase 1/2 trial of its JTX-2011 candidate cancer treatment showed good tolerance for the treatment across patients with different types of solid tumors, but many of its response rate metrics weren't as strong as those watching the company had wanted to see. Analysts at Wells Fargo were especially downbeat, cutting their rating on the biotech stock from outperform to market perform and slashing price targets by 65% to $13 per share. Many have hoped that Jounce would get bought out, but unless that happens, some investors seem scared that further declines are possible.

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