Why Mattel, Iron Mountain, and J.C. Penney Slumped Today
Tuesday was another positive day for most of the stock market, although certain segments did better than others. Among major benchmarks, the Dow performed the best, with triple-digit gains taking the average to another record high. The S&P 500 saw less robust gains, and the Nasdaq Composite actually lost ground on weakness in some major technology stocks. Overall, though, investor sentiment seemed relatively positive, with many looking for a rate hike from the Federal Reserve tomorrow but still thinking that the economy can sustain future growth. Still, bad news from Mattel (NASDAQ: MAT), Iron Mountain (NYSE: IRM), and J.C. Penney (NYSE: JCP) put those stocks among the worst performers on the day. Below, we'll look more closely to tell you why they did so poorly.
Shares of Mattel dropped 5% after the toymaker said that it believes that its holiday sales will be weak. Key brands like Barbie and Fisher-Price are seeing stronger competition, and toy retailers are being more conservative about stocking large inventories of Mattel toys. The news followed moves from bond rating agency Moody's to cut its ratings on Mattel bonds to Ba3 from Baa3, removing its former investment-grade status and turning the toymaker's existing debt into junk bonds. Mattel has already made aggressive moves to survive in a tough industry environment, but investors increasingly fear that those moves might prove insufficient to save the company in the long run.
Image source: Mattel.
Source: Fool.com