2 Stocks Leading the Market's Sell-Off

Markets are down as commodities take center stage. Stagnation in the U.S., turmoil from Europe, and a slowdown in China have thrown cold water on the commodities story of hungry nations fighting for scarce resources. Here at home, a shale gas boom and regulations favoring cleaner alternatives have combined with weak industrial demand to hammer coal companies. Concerns are growing that Patriot Coal (NYSE: PCX  ) is the harbinger, and its sudden bankruptcy will not be an isolated event. James River Coal (Nasdaq: JRCC  ) has been caught in the panic, and is down 25% on the day, as anticipated future losses worsen a significant debt burden. With no relief on the horizon, investors need to show caution with the sector, even after today's sell-off.

That said, let's take a look at how the three major indexes are faring and take a closer look at today's newsmakers.

Index

Gain/Loss

Gain/Loss %

Intraday Value

Dow Jones Industrial Average (INDEX: ^DJI  ) (77.34) (0.61%) 12,658.95
Nasdaq (INDEX: ^IXIC  ) (25.16) (0.86%) 2,906.61
S&P 500 (10.67) (0.79%) 1,341.79

Source: Yahoo! Finance as of 2:20 p.m. EDT.

The Nasdaq is leading today's plunge, but all three major indexes have shaved off over half a percent in value. James River is actually the Nasdaq's second-worst performer. Top honors belong to MAKO Surgical (Nasdaq: MAKO  ) , which fell on its face with its second-quarter "select operating results." Last quarter's miss and guidance revision knocked shares from the mid-$40s to the mid-$20s. We are seeing a similar 40% plunge today on an even worse result. Sure, RIO system sales were up sequentially, but they were off 25% year over year. Even worse, management lowered guidance again, targeting 42-48 RIO sales in 2012, a far cry from 62, and the estimated number of procedures is now coming in toward the bottom of their original range. These are difficult times for MAKO investors, as management appears to have wildly overestimated their growth trajectory, and when a company doesn't have earnings, the market at least expects growth.

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David Williamson owns shares of MAKO Surgical, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of MAKO Surgical. Motley Fool newsletter services have recommended buying shares of MAKO Surgical. The Motley Fool has a disclosure policy.
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Read/Post Comments (3) | Recommend This Article (3)

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  • Report this Comment On July 10, 2012, at 4:24 PM, Moye100 wrote:

    This is the devils stock.

  • Report this Comment On July 10, 2012, at 6:26 PM, meatmann50 wrote:

    You gotta know when to get out....I bought mako @ 18$ and more @ 24$,got out @ 39$..In todays market you can't buy to hold...with the problems in Europe,Obama wanting to tax everyone..this will be the worst election year market ever.If you have more than a 20% gain you need to take profits and wait for a better price.....

  • Report this Comment On July 10, 2012, at 6:33 PM, meatmann50 wrote:

    However,having said that,mako IS a long term play and I will definitly buy more,small-caps are very volitile.You can always hold and buy more on these dips.....

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