Why Qualcomm, Inc. (QCOM), JPMorgan Chase & Co. (JPM) and Arista Networks Inc (ANET) Are 3 of Today’s Worst Stocks

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The bears were in charge from the get-go on Tuesday, never letting any of the major indices into positive territory for the session. When it became clear the bulls were fighting a losing battle by mid-day though, the buyers largely threw in the towel. The S&P 500’s close of 2,267.89 was 0.30% less than Friday’s final trade.

Why Arista Networks Inc (ANET), JPMorgan Chase & Co. (JPM), QUALCOMM, Inc. (QCOM) are Three of Today's Worst Stocks Leading the bearish charge today were Qualcomm, Inc. (NASDAQ:QCOM), Arista Networks Inc (NYSE:ANET) and JPMorgan Chase & Co. (NYSE:JPM). Each was driven lower by news, with most of the selling spurred one way or another by legal trouble.

JPMorgan Chase & Co. (JPM)

It was a rough day for banks as a whole, with the group’s profit-takers coming out of the woodwork on the heels of market weakness. JPMorgan Chase largely led the way though, with JPM losing 3.5% of its value following a key downgrade.

KBW analysts Brian Kleinhanzl and Michael Brown did the deed, downgrading JPM to “Market Perform,” explaining:

“We continue to believe that JPMorgan is a high-quality bank but our outperform thesis for JPM focused on the potential to improve returns and we believe the current share price captures that return improvement JPM could achieve in the near term … There is a possibility that a new expense save program could be announced at the upcoming investor day but it is difficult to remain Outperform on the hope for an expense save announcement.”

Qualcomm, Inc. (QCOM)

On the precipice of another wave of bullishness, the rug got pulled out from underneath Qualcomm investors today. On Tuesday, the Department of Justice reported it was preparing a suit against the mobile phone technology maker, claiming it was unfairly and unreasonably requiring licensing fees for technology used in most mobile phones.

The potential suit is founded on an ongoing investigation from the Federal Trade Commission, which has been investigating the company for several years now. The FTC is specifically trying to determine if QCOM is essentially capitalizing on a monopoly by charging fees on equipment that meets the industry standards it also dictates. The heart of the impending litigation will be the precise definition of “reasonable and non-discriminatory”… terms that are supposed to serve as the standard of fairness among technology companies.

QCOM ended the day down 4%.

Arista Networks Inc (ANET)

Finally, although the fight has been brewing for months, the legal battle between Arista Networks and networking giant Cisco Systems, Inc. (NASDAQ:CSCO) sparked a particularly adverse development for the smaller outfit, sending ANET to a loss of 12% for the session.

That development? Late Friday, the U.S. Customs department reinstated a ban on the import of Arista routers that may — as Cisco claims — be in violation of U.S. patent laws. The agency had lifted the ban in November, suggesting the legal battle had taken a positive turn in favor of ANET shareholders. Now, though, the U.S. Customs and Border Patrol Agency is publicly questioning its decision to lift the ban before the matter had been settled in court.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/why-qualcomm-inc-qcom-jpmorgan-chase-co-jpm-and-arista-networks-inc-anet-are-3-of-todays-worst-stocks/.

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