Why Lowe's Companies, Frontier Communications, and Stratasys Slumped Today

The stock market didn't do well on Wednesday, as investors appeared to lose confidence late in the session. After initially climbing, major benchmarks finished with fairly substantial losses, and some on Wall Street seem to fear that the return of inflationary pressures could finally put the nail in the coffin of the long-lived bull run among U.S. stocks. Bad news from some sectors of the market also weighed on investor sentiment. Lowe's (NYSE: LOW), Frontier Communications (NASDAQ: FTR), and Stratasys (NASDAQ: SSYS) were among the worst performers on the day. Here's why they did so poorly.

Lowe's falls down

Shares of Lowe's Companies lost 6% after the home improvement retailer released its fourth-quarter financial results. Lowe's said that net income was down 16% on a 2% drop in revenue, and even though comparable-store sales rose by more than 4%, the retailer sees its growth starting to slow in 2018. The biggest problem for Lowe's remains that it hasn't been able to match the stronger growth figures that its primary rival in the big-box home improvement retail space has managed to put up. That means that Lowe's has to fight a multi-front battle, not only defending its turf from competitors with similar business models but also against innovative companies looking to disrupt the big-box retail model. Until the company figures out how to position itself against those challenges, Lowe's could continue to struggle.

Frontier's dividend gives up the ghost

Frontier Communications stock plunged 24% after the telecom company finally pulled the plug on its dividend payout. Frontier said that it would divert the money that would have gone toward paying shareholders back toward paying down some of the debt it has incurred from massive acquisitions over the years. Frontier had already tried reducing its dividend multiple times, including a more than 60% cut last year. Yet with its acquired businesses failing to perform up to expectations, capital has gotten scarce, and Frontier felt that it had no choice but to put an end to the cash drain from dividends. Even with the move, few investors see much hope for a full recovery for the telecom company.

Stratasys sees losses persist

Finally, shares of Stratasys gave up more than 16%. The 3D printing specialist released fourth-quarter financial results that included further losses on a slight decline in revenue. Stratasys also said that it expects that revenue growth could continue to languish throughout 2018, with guidance figures that were largely weaker than most had expected. Having broken its streak of satisfying investor expectations, Stratasys will now have to figure out how to get itself back to profitability as quickly as possible before investors begin to lose their remaining confidence in the company.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Lowe's and Stratasys. The Motley Fool has a disclosure policy.