Why NVIDIA, U.S. Steel, and Jack in the Box Slumped Today

By Dan Caplinger Markets Fool.com

The stock market set some more records on Thursday, with the Dow climbing to another all-time high and other major market benchmarks posting mixed results. Solid prospects in the global economy and continuing progress on the domestic front toward a more business-friendly regulatory environment kept momentum moving upward, and market participants remain impressed at the extent to which the market has tenaciously avoided even modest pullbacks. Yet some stocks had bad news that kept them from enjoying gains, and NVIDIA (NASDAQ: NVDA), U.S. Steel (NYSE: X), and Jack in the Box (NASDAQ: JACK) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

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NVIDIA takes a hit

Shares of NVIDIA fell 9% after the graphics-chip specialist suffered negative comments from analysts at a couple of different companies. Analysts at Instinet cut their rating on NVIDIA from buy to "reduce" and made a $10 reduction in their target price for the stock to $90 per share, saying that despite its early success in the cloud computing and self-driving automotive arenas, valuations have hit their highest levels in a decade. Meanwhile, BMO Capital also downgraded the stock, moving its rating from market perform to underperform, and issuing an $85-per-share price target. Yet even with today's drop, NVIDIA stock is still up more than 200% over the past year, and some will inevitably argue that the stock should fall further before it will be fairly valued.

Image source: NVIDIA.

Steel falls despite Trump meeting

U.S. Steel stock declined 8% even though CEO Mario Longhi and executives at other infrastructure-related companies met with President Trump on Thursday. Longhi was optimistic about the prospect of bringing manufacturing jobs back into the U.S., but investors reacted negatively to reports that the White House might seek to delay in infrastructure spending bill until next year. U.S. Steel and its peers have soared since the presidential election in the hope that a federal stimulus package would bolster their prospects and help them bounce back from years of poor global conditions in the industry. Yet with many competing priorities vying for attention from the new administration, steel investors might have to wait their turn in order to see any expected bounce in domestic demand for the metal and similar infrastructure-related products.

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Jack in the Box looks less appetizing

Finally, shares of Jack in the Box dropped 7%. The fast-food company said that its fiscal first-quarter financial results included some disappointing performance, especially from the company's Qdoba restaurant chain. Systemwide comparable-restaurant sales for the namesake Jack in the Box franchise were up 3.1%, including a nearly 4% rise in franchisee-owned locations. However, Qdoba comps suffered a 1% systemwide drop, with falling traffic being the dominant factor in the decline. Moreover, investors weren't happy with guidance that included expected comparable-restaurant sales declines of 0% to 2% at Jack in the Box and 1% to 3% at Qdoba for the current quarter. With reductions in full-year fiscal 2017 projections as well, investors fear that Jack in the Box might have to wait longer to see the positive impacts of its efforts to cut overhead expenses and other costs.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends NVIDIA. The Motley Fool has a disclosure policy.