Why Pioneer Natural Resources, United States Steel Corp., and Best Buy Co. Are Today's 3 Worst Stocks

Nine in 10 sectors ended in the black, and most stocks advanced in the stock market today. The S&P 500 Index (SNPINDEX: ^GSPC  ) eked higher yet again, tacking on its fourth-straight day of gains. With no terribly important economic indicators to look forward to for the rest of the week, Wall Street will look to corporate America instead for guidance as earnings season continues in full force. Despite Monday's general optimism, Pioneer Natural Resources (NYSE: PXD  ) , United States Steel Corp. (NYSE: X  ) , and Best Buy Co. (NYSE: BBY  ) each tumbled like clumsy kids polka-dancing today. The S&P 500, however, proved itself a competent dancer, adding 7 points, or 0.4%, to end the day at 1,871.

Shares of Pioneer Natural Resources fell 1.6%, bringing an end to a four-day win streak of their own. The oil and natural gas producer focuses most of its extraction efforts in Spraberry field and the Eagle Ford Shale play, both in Texas. With billions of barrels of proven oil and natural gas liquids to its name, as well as hundreds of billions of cubic feet of gas in its reserves, Pioneer Natural's stock tends to fluctuate with the prices of those commodities. While oil prices were nearly unchanged Monday, the price of natural gas fell by nearly 1%, impairing the value of the company's significant reserves.

U.S. Steel blast furnace being tapped. Source: U.S. Steel website.

United States Steel Corp., although an industrial mainstay in the U.S. for more than 100 years, is a volatile stock, and shares shed 1.5% today to prove it. It pays a meager 0.7% annual dividend, and shareholders can thank their lucky stars that interest rates are staying low for the time being, since U.S. Steel can't even afford to pay that out of their own pockets. U.S. Steel hasn't made a dime in the last five years, and even sales have fallen for the last two years. If interest rates were to rise markedly in the near future, the company might not deem it wise to continue borrowing money to pay dividends, and U.S. Steel could be forced to cut its dividend again, as it did in 2009. Investors should look over next week's quarterly earnings carefully and listen to the conference call for what management says about getting profitability back on track.

Best Buy also finished in the depths of the S&P 500, losing 1.5% Monday. Last week, after a nearly 30-year veteran of the company decided to step down as head of its U.S. retail operations, as the stock tumbled more than 4% in two days. Perhaps he sees the trend Best Buy bears have been harping about for years: anything that can be sold online is being sold online, and if there's one area that's fighting for survival because of e-commerce competition its consumer electronics. Best Buy, of course, is still with us, and I doubt it'll be going the way of Circuit City any time soon. But with same-store-sales down 0.8% in its last fiscal year, worries about Best Buy's long-term staying power are legitimate.

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  • Report this Comment On April 22, 2014, at 6:12 PM, davidscott1 wrote:

    I recently read that cheap imports from China are going to be a factor that would affect the sales of the US steel industry including US Steel itself. The US steel imports have risen since the start of this year. A worrying sign indeed. http://goo.gl/wPyrjW

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