Why Nike, Deere, and Matson Slumped Today

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Friday was a tumultuous end to a tough week, as many investors focused on the ongoing political shakeup at the White House. Chief strategist Stephen Bannon left his role with the Trump administration, and market participants appear to be increasingly nervous about the prospects for progress on key initiatives like tax reform, infrastructure spending, and healthcare policy. Major benchmarks didn't make significant moves, but their failure to bounce back from Thursday's big drop was a departure from the bull market's behavior lately. Adding to the gloom was bad news from several individual companies, and Nike (NYSE: NKE), Deere (NYSE: DE), and Matson (NYSE: MATX) 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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Nike watches the other shoe drop

Shares of Nike fell 4% after sales results at major shoe retailers indicated a loss of demand for premium athletic footwear. Both Foot Locker and Hibbett Sports reported disappointing results, piling on after other sporting goods retailers suggested similar issues for the industry. One retailer's management said that sales of top styles in footwear and apparel didn't live up to expectations, complaining that providers like Nike were responsible for "limited availability of innovative new products in the market." Nike bulls hope that the slump at third-party retailers reflects a shift toward direct-to-consumer channels that the athletic giant has established, but shareholders won't know for sure until Nike releases its own results.

Deere gets another downgrade

Deere stock fell 5% in the wake of more negative comments from analysts. Today's downgrade came from R.W. Baird, which cut its rating on the farm equipment specialist from outperform to neutral and cut its price target on the stock by $10 to $130 per share. Analysts acknowledged solid performance in Deere's most recent quarterly report, but they believe that weakness in the agricultural sector will make it more difficult for the company to keep up its pace of growth going into fiscal 2018. Even with today's losses, Deere stock is up by more than half since mid-2016, and investors can expect to see more cyclical ups and downs in the future.

Competition runs Matson aground

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Finally, shares of Matson plunged 22%. The shipping company has historically benefited from a lack of competition in key trade routes in the Pacific region, especially between various ports on the West Coast of the continental U.S. and the Hawaiian Islands. However, a new competitor has emerged that could take away Matson's dominance of those key markets, with plans to acquire newly built shipping vessels in 2020 and 2021. Even though that leaves time for Matson to enjoy its current position, investors worry that an eventual drop in market share could hurt the company. Some saw today's move as an overreaction, but only time will tell whether Matson can withstand new competitive pressures.

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