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 (INDEX: ^GSPC) ended at fresh all-time highs on Monday, edging slightly higher. Wall Street kept some momentum from Friday, when private sector payrolls jumped more than expected, showing strength in the jobs market. The S&P 500 Index added three points, or 0.2%, to end at 1,808 today. But despite the general uptrend, several stocks stuck out as big losers to begin the week.
Energy company Newfield Exploration (NYSE: NFX) slumped 8% in trading on Monday, ending as the worst-performing stock in the entire benchmark index. The fall came after a production output from Newfield management, which forecast domestic liquids production growth of 30% in 2014, far below the 38% Wall Street was looking for. Research outfit Jefferies, using today's figures, thinks the fair value of the stock today is closer to $23, a full 5.5% below today's closing level of $24.33. Shareholders should keep a close watch on production going forward to ensure these tempered targets are met, because if they aren't, day's like today could become commonplace in the future.
Another energy company, First Solar (NASDAQ: FSLR), saw its shares lose 3.3% Monday, despite little company-specific news you'd expect to impact the stock. That said, First Solar stock is more than twice as volatile as the market itself, and longtime investors in this innovative technology know the inherent risks in investing in such a new and unproven industry. Shareholders have been well-rewarded for their risk tolerance in 2013, as the stock soared more than 80% in that period. With First Solar now both profitable and a leader in the emerging solar segment, it's easy to see why the stock has been so successful. Competition from China continues to be a major factor to watch out for going forward.
Lastly, shares of Marathon Petroleum (NYSE: MPC) shed 1.9%, as Wall Street reacted with utter indifference to a report from JPMorgan, in which the bank boosted the price target on shares from $67 to $81. Marathon's stock was also upgraded to neutral from underweight, as JPMorgan expressed confidence that the Ohio-based refiner could improve its margins. The success of companies like Marathon Petroleum is almost entirely dependent on future oil prices, so investors should ideally have a strong opinion on how that market will play out before taking a position in an investment like this.