The stock market sank on Tuesday, sent lower by rising trade conflict between the U.S. and China. The latest round of tariffs took effect over the weekend, and a permanent solution seems further away than ever right now even as the global economy continues to show signs of slowing. Some companies had particularly bad news that sent their shares sharply lower. Generac Holdings (NYSE:GNRC), Cleveland-Cliffs (NYSE:CLF), and Napco Security Technologies (NASDAQ:NSSC) were among the worst performers. Here's why they did so poorly.
Generac loses some of its Dorian bump
Shares of Generac Holdings fell more than 5%, giving up much of their gains from last week as investors watched the likely path of Hurricane Dorian. Previously, it appeared that Florida might make a direct hit from the storm, and historically, major storms have led to massive sales of Generac's home power generators. Dorian is still a threat, but the likelihood of its grazing the Southeast coast probably won't have as big of an upward impact on Generac sales. Even with the drop, Generac shares are still up about 50% so far in 2019.
Cleveland-Cliffs can't satisfy shareholders
Cleveland-Cliffs saw its stock drop nearly 15% despite announcing what most investors would normally see as good news. The company said that it would boost its regular quarterly dividend by 20% to $0.06 per share, and it also declared a special dividend of $0.04 per share on top of that. Yet as a producer of iron ore, Cleveland-Cliffs relies on a healthy steel market to support the companies it supplies with raw materials for steel production. When tariffs present obstacles to free trade in the steel market, it often causes investors to get more concerned not just about steel producers but also the companies like Cleveland-Cliffs that supply them with iron ore and metallurgical coal. Until trade relations with China improve, it could be tough for Cleveland-Cliffs to mount a full recovery.
Napco looks less secure
Finally, shares of Napco Security Technologies plunged 22%. The high-tech security solutions company said that it enjoyed its 20th straight quarter of year-over-year record sales, with revenue climbing 9% in its fiscal Q4. Net income also jumped 60% for the full fiscal year compared to prior-year levels. Yet investors had hoped that Napco would do even better, especially as it seeks to expand into promising areas like communication devices for Internet of Things applications. Napco has a lot of potential, but it'll have to work a little harder to unlock all of it.