Today's 3 Worst Stocks in the S&P 500

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.

The S&P 500 Index (SNPINDEX: ^GSPC  ) fell for a third straight day today, as Wall Street continued to pre-emptively stress over Friday's job numbers. You'd think a good jobs report would send the stock market higher, but in fact that's the source of the market's unnecessary stress. If the economy is too strong, investors fear the Federal Reserve will start paring its $85 billion monthly stimulus package. The S&P 500 shed two points on Wednesday, or 0.1%, to end at 1,792.

Data storage company Teradata (NYSE: TDC  ) slumped 6.2%, falling suddenly on a downgrade from Morgan Stanley (NYSE: MS  ) analysts. It was Teradata's second downgrade from Morgan Stanley in the last two months, as analysts rapidly transitioned from an upbeat outlook to recommending investors hastily flee for the exits. Slower growth is to blame, as lower-cost competitors start gnawing away at Teradata's prospects. 

Analysts were again to blame for Kinder Morgan's (NYSE: KMI  ) decline today, as the stock dropped 4.6%. The company projected that it wouldn't be issuing quite the dividend Wall Street had expected next year. It's already paying a 4.6% annual dividend to investors in the oil and gas pipeline business, but income investors don't just look for a high payout -- they'd like to see that payout grow. In all likelihood, Kinder Morgan's dividend will grow: The company said it would likely increase from $1.64 per share to $1.72 per share, or about 5%, next year. Investors were looking for growth closer to 8.5%. 

Finally, J.C. Penney (NYSE: JCP  ) stock lost 4.5% as investor expectations again conflicted with reality. The department store only recently started reporting monthly sales again, which in itself was seen as a huge step forward for the beleaguered retailer. That does mean, however, that shareholders have one more data point each month that can either drive gains or encourage sell-offs. Unfortunately, November's numbers disappointed, despite a 10% growth in sales. J.C. Penney is retaking Retail 101 classes, offering sales discounts once again, which is helping revenue streams but hurting margins. The company is in pure turnaround mode, and that means constant pulse-taking and volatility.

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  • Report this Comment On December 05, 2013, at 10:14 AM, martin07 wrote:

    I thought JCP was dropped from S&P 500 and added to midcap 400 last week. What is this writer thinking? Or did I miss something and they kept JCP in S&P 500?

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