Tuesday was a somewhat downbeat day for the stock market, but major benchmarks finished the session in a far better place than where they began. The Dow had dropped more than 150 points near the open, as investors feared that some of the long-downplayed threats to the bullish thesis for stocks might finally start to have a more pronounced impact. Yet by the afternoon, they once again reached a comfort level about overall risks in the market. Even with the partial recovery, some stocks weren't able to claw back all their losses. Nike (NKE 3.14%), Seagate Technology (STX +0.00%), and JD.com (JD +2.08%) were among the worst performers on the day. Here's why they did so poorly.
Nike takes a knee
Shares of Nike fell 3% in the wake of controversy surrounding its latest athlete endorsement for its "Just Do It" advertising campaign. The athletic footwear and apparel giant released ads featuring former San Francisco 49ers quarterback Colin Kaepernick, who became the focal point of protests among National Football League players by getting down on one knee during the playing of the national anthem. Many Nike customers were outraged by the move, showing pictures of them destroying their Nike products on social media, but others praised the campaign. For the stock, today's decline took only a tiny bite out of the 50% gain the shares have enjoyed over the past year.
Image source: Nike.
Seagate has some investors scared
Seagate Technology stock dropped 8% after the hard-disk drive manufacturer received a downgrade from an analyst company. Analysts at Evercore dropped their rating on Seagate from in-line to underperform and cut their price target on the stock by $10 per share to $45. After having enjoyed a long period of strength, analysts see a new downward cycle for flash memory prices that could force Seagate to cut its own product prices, potentially leading to a longer-term downturn for the data storage specialist. Evercore isn't the first to see potential problems for Seagate, but with shares down more than 15% from where they were earlier this year, the threat of a reversal of fortune for the company appears to be growing.
JD deals with CEO troubles
Finally, shares of JD.com fell another 6%. The Chinese company has been at the center of controversy recently, as CEO Richard Liu has had to deal with allegations of sexual misconduct over the past week. Last Friday, Liu was briefly arrested in Minnesota before being released and returning to Chinese soil. The Wall Street Journal reported that Liu had been arrested on suspicion of rape but no charges had been filed. Attorneys for Liu say that they don't expect charges to be filed. The Wall Street Journal quoted a lawyer for Liu as saying: "There is no believable or credible evidence that he has done anything wrong and he denies any wrongdoing."
Still, given that the chief executive holds voting rights that give him roughly 80% control of JD, negative publicity surrounding the allegations could prove to be problematic for JD's reputation amid an extremely crowded and competitive environment in the Chinese internet industry.
