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

From basic materials to consumer services, these three equities were the worst performers in the stock market today.

Mar 10, 2014 at 7:22PM
Longview

The S&P 500 Index (SNPINDEX:^GSPC) eased back from its record closing high on Friday, ending slightly lower after surprisingly weak trade data from China sent a shiver down the back of Wall Street. Expecting Chinese exports to rise by nearly 7% in February, they instead fell by more than 18%, betraying an unforeseen softness in the world's second-largest economy. The stock market pulled back briefly in January after Chinese manufacturing data disappointed, but today's numbers didn't spook investors quite as much, and the S&P 500 fell by less than 1 point, or 0.1%, to end at 1,877. 

Cliffs Natural Resources (NYSE:CLF) was the most miserable stock in the whole index today, losing 3.8% in trading. The success of Cliffs Natural, although based in Cleveland, is closely tied to the ups and downs of China's economy. As one of the largest steel producers in the world, China relies on Cliffs Natural and other companies that produce iron ore and metallurgical coal, two necessary inputs in steel production. This is where Cliffs' lack of diversification plays against the company; expect shares to remain high-risk gambles as long as China is able to singlehandedly impact commodities prices so dramatically. 

Shares of another coal miner, Peabody Energy (NYSE:BTU) shed 3.7% Monday. As goes China, so go many coal and commodities plays, and with China's poor showing today, Wall Street had very little to be excited about in the coal industry. Peabody Energy specifically is also still suffering from a sudden move to shake up its executive team, an announcement that sent the stock plunging more than 5% on Friday. Coal in general is not an area I'm attracted to as a long-term investment given the increasing focus on cleaner, alternative forms of energy, but the days of a worldwide sustainable energy ecosystem are still decades away, so until then coal's not as doomed as it's made out to be.

Finally, shares of security provider ADT Corporation (NYSE:ADT) dropped 2.8% on Monday, as the stock proved unable to shield investor portfolios from losses. Top-line growth at ADT has slowed from over 20% in 2011 to less than 3% in 2013, a troubling trend that, should it continue, implies that cost reduction is the only way to grow net income. ADT does reward investors, however, for putting their money behind a slow and steady business, as its dividend currently sits at 2.6%. From a long-term perspective, the "Internet of things" could prove to be a game-changer in the home security market, and if ADT can't keep up, software firms that allow you to monitor your house through an app may pose an imposing threat to the traditional model.

How to cash in on "The Internet of Things"
Every investor wants to get in on revolutionary ideas before they hit it big -- like buying PC maker Dell in the late 1980s, before the consumer computing boom, or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hypergrowth markets. The real trick is to find a small-cap "pure play" and then watch as it grows in explosive fashion within its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 trillion industry. Click here to get the full story in this eye-opening report.

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

The Motley Fool recommends and owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers