Why Many Manufacturing Infrastructure Stocks Plunged on Monday
Many companies on the hardware side of the tech sector had a very bad day on Monday. Machine vision specialist Cognex (NASDAQ: CGNX) closed the day 10.9% lower, automated testing systems expert National Instruments (NASDAQ: NATI) fell 11.2%, and NCR (NYSE: NCR), which makes barcode scanners and ATM kiosks, took a 16.4% hit at the end of the day.
None of these companies had any significant news of their own to share today. All of them were pulled down by a marketwide panic about a further reach of the novel coronavirus. The COVID-19 disease has now been found in more than 110,000 people around the world, with particularly heavy outbreaks in China, Italy, and Iran. Schools are closing in Spain, and the entire country of Italy is now on lockdown.
The disease is stopping millions of people from going to work, which is bad news for companies like Cognex and National Instruments, which depend on activity across the manufacturing sector. When factories slow down or even stop their manufacturing lines, they're not investing in their product-testing infrastructure. NCR's barcode-scanning systems also cater to this market. NCR is in the midst of a high-level strategy shift toward providing software and services supporting its kiosks and scanners, and those revenue streams can slow down in a hurry when the global economy slows down.
Source Fool.com
