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

From telecom to finance to consumer goods, not one sector could escape today's Wall Street bloodbath.

Feb 3, 2014 at 7:10PM

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.

More than eight in 10 stocks lost ground today, as Wall Street lamented weak January U.S. manufacturing numbers. Although it's easy to blame weak domestic production on the lousy weather -- there's been plenty of that going around -- the ISM Manufacturing Index missed consensus estimates so emphatically that even Mother Nature couldn't have been solely responsible. Bloomberg's consensus estimate for the manufacturing index called for a reading of 56, while the actual number came in at 51.3. Wall Street was promptly feasted upon by bears. The S&P 500 Index (SNPINDEX:^GSPC) lost 40 points, or 2.3%, to end at 1,741. 

$4 billion telecom provider Frontier Communications (NASDAQ:FTR) ended as one of the steepest decliners on Monday, losing 5.6% by day's end. The company is in a brutal business, one dominated by a handful of fiercely competitive corporate giants that dwarf the size of Frontier Communications. On top of that, the company has loads of debt on its balance sheets, and pays an 8.5% dividend that looks dangerously unsustainable. That said, shares were up nearly 3% after-hours on news that Frontier was taking the bureaucratic steps necessary to acquire AT&T's Connecticut "wireline, broadband, and video operations," according to a press release.

While Frontier's after-hours rebound gave some solace to investors, stock in E*Trade Financial (NASDAQ:ETFC) wasn't bouncing back in late trading. Shares of the online broker slumped 4.9% today; the financial sector as a whole was off about 2.4%. With nothing particularly negative in the news Monday, investors may simply be mourning the absence of the famed "E*Trade Baby" from last night's Super Bowl ad spots. E*Trade's ads featuring a witty, financially sophisticated talking baby raving about his favorite online broker have been some of the most memorable Super Bowl ads in recent years, but the baby was conspicuously absent from last night's advertising extravaganza.

Lastly, shares of Johnson Controls (NYSE:JCI) fell 4.5% Monday, as the auto parts manufacturer was also partially the victim of a sell-obsessed markets. The consumer goods sector lost 2.4% today. Johnson Controls stock certainly wasn't boosted by the unexpected drop in U.S. manufacturing last month, and since the stock tends to be a bit more volatile than the market at large, this looks like a case of some ambitious Wall Street extrapolation.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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