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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
While there's no such thing as perfection in the stock market, the S&P 500 Index (SNPINDEX: ^GSPC ) had been taking a pretty good stab at it in September -- until today came around. After rising in all seven sessions thus far this month, the benchmark index finally slipped on Thursday, falling 5 points, or 0.3%, to end at 1,683. Leading the retreat today was a weak materials sector, which managed to log two out of today's three biggest decliners. Even underperformance is a hard thing to get perfect.
Cliffs Natural Resources (NYSE: CLF ) kicks off the worst of the worst today, losing 5.2% on a downgrade from FBR Capital Markets. "It's not you, it's your valuation" seemed to be the mantra behind the move, and with a 50% run-up in recent months, it's a compelling point on the face of it. Such gaudy short-term returns can be misleading, however. Stock in the coal miner is still down more than 40% this year, so does that make it a buy? With coal steadily losing ground to other sources of energy across the globe, it's admittedly difficult to make the bullish case for Cliffs today.
Newmont Mining (NYSE: NEM ) , the second stock on today's list from the materials sector, saw shares dip 4.2% as the price of gold plunged 2.4%. The price of the precious metal has cratered 25% from its 52-week high near $1,800 an ounce, and with the Federal Reserve expected to announce a slowdown in its monthly stimulus plan next week, you can be sure gold bugs will be listening carefully. If the Fed decides to taper at a slower rate than expected, gold prices -- and Newmont's stock -- could get a boost.
Lastly, oil refiner Valero Energy (NYSE: VLO ) dropped 3.8%. The refining industry is already on thin ice with Wall Street as its margins have been squeezed by rising oil prices. So when the company announced late yesterday that it may see higher capital expenditures next year, shareholders weren't happy. On top of that, Valero pushed back several of its planned projects, two of which will be delayed by three years apiece.
Although companies focused around commodities and materials performed poorly today, don't go writing off stocks in those areas just yet. One company in particular rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 2.19 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!