Last Week's Biggest Stock Laggards

Sandwiched smack between the Christmas and New Year's holidays, the past week was largely a sleeper. Volume for the Dow Jones Industrial Average (INDEX: ^DJI  ) was close to half of its 2011 average during the week as investors and traders took time away from the market's grind. News was light, but there was enough pessimism to keep the U.S. markets in the red for the last week of the year.

The Dow slid 0.6% for the week, while the broader Russell 3000 dropped 0.7%. While investors flocked to defensive sectors, industries that rely more on global growth were the week's bottom performers.

The 3 Worst-Performing Sectors

Russell 3000 Sector

Weekly Price Change

Month-to-Date Price Change

Materials (1.4%) (2.2%)
Financials (1.2%) 1.8%
Industrials (1%) 1%

Source: S&P Capital IQ. Weekly Price Change is Dec. 23-Dec. 30. Month-to-Date Price Change is Nov. 30-Dec. 30.

Here's the thing -- when a company is already bankrupt, it's unwise to expect great news as an investor. Case in point: American Airlines parent AMR (NYSE: AMR  ) . It declared Chapter 11 bankruptcy in late November after losing the battle with debt and labor costs. So what could have possibly happened in the last week of the year to make the stock plunge 41%? The New York Stock Exchange announced that it's delisting AMR's shares.

It wasn't a very merry Christmas for Sears Holdings (Nasdaq: SHLD  ) , its shareholders, or many of its employees. It's been a tough environment for retailers in general, but Sears has also been left in the dust by the other major retailers. Following a lackluster holiday season, the Illinois-based company basically waved the white flag, announcing that it will be closing 100 to 120 of its stores. Investors did not take the news in stride.

The 3 Worst-Performing Russell 3000 Companies

Company

Weekly Price Change

AMR (41.2%)
PMI Group (32.3%)
Sears Holdings (30.7%)

Source: S&P Capital IQ. Weekly Price Change is Dec. 23-Dec. 30.

Also among the week's worst performers were Computer Sciences (NYSE: CSC  ) and Molycorp (NYSE: MCP  ) . There were at least 1.5 billion reasons for investors to be frustrated with Computer Sciences in the final week of the year, as the tech contractor announced that it will take a $1.5 billion writedown on its investment in a U.K. government health-care contract. As if that's not bad enough, the contract negotiations that sparked the writedown may cost the company even more, and Moody's has put the company's ratings under review.

Molycorp, meanwhile, was hit by an about-face in China. Specifically, the Chinese government boosted the amount of rare-earth minerals it will allow its producers to export. This is worrisome for Molycorp because the more rare-earth minerals China allows to leave its borders, the lower the price non-Chinese producers like Molycorp are likely to get for their resources.

That's it for the weekly laggards recap. Looking to turn the tides and find some strong outperformers in the year ahead? The Motley Fool has created a brand-new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access by clicking here -- it's free.

Motley Fool newsletter services have recommended buying shares of Moody's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer does not have a financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1751243, ~/Articles/ArticleHandler.aspx, 9/22/2014 12:17:28 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement