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.
With Friday's gains, the S&P 500 Index (SNPINDEX: ^GSPC ) closed out a great week, during which it tacked on 2% on good economic news from China, and bets on the upcoming Federal Reserve meeting next week. The benchmark added four points, or 0.3%, today, ending at 1,687. That said, these three S&P components all sold off intensely today, highlighting the index's worst performers.
Peabody Energy (NYSE: BTU ) lost 3.2%, as the coal giant's legal battle with the United Mine Workers of America, or UMWA, intensified. Peabody requested courts uphold Patriot Coal's current contracts with the UMWA, which will no longer require the company to pay retiree heath-care benefits come January 1, 2014. On top of that, the U.S. coal industry, in general, faces headwinds, with other sources of energy taking market share, and exports to China threatening to decline as Chinese producers become more price competitive.
Oil and gas pipeline company QEP Resources (NYSE: QEP ) shed 2.3% after the stock was downgraded at Deutsche Bank, to hold, from buy. Despite the company's exposure to the coveted Bakken formation -- a rich source of shale deposits that's sparked a flurry of companies to frack in the area -- QEP's stock has failed to perform, losing ground over the last one-year, three-year, and five-year periods.
Lastly, contract-drilling company Ensco (NYSE: ESV ) dropped 2.2% Friday, a decline that was also fueled by negative analyst sentiment. Bernstein downgraded the stock to a market perform rating, from outperform, citing broader trends in the rig industry that it sees as negatives for offshore drillers, in general. The sell-off means Ensco now trades at about 10 times earnings, while paying a 3.6% dividend. While investors should always be mindful of a value trap, energy gurus may want to keep an eye on Ensco's stock should the market become unreasonably bearish.
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