Stocks finished the week on a higher note Friday, as surprisingly strong real estate numbers brought out the bulls today. April housing starts soared, rallying more than 13% from March levels as developers got busy as the cold weather abated. Regardless of how busy developers were getting, investors in Chesapeake Energy Corporation (NYSE: CHK ) , Cliffs Natural Resources (NYSE: CLF ) , and NetApp (NASDAQ: NTAP ) still headed for the exits. The three stocks ended as the worst performers in the entire S&P 500 Index (SNPINDEX: ^GSPC ) on Friday. The S&P, for its part, added seven points, or 0.4%, to end at 1,877 today.
Shares of Chesapeake Energy shed 4.7% in trading as the company announced a flurry of strategic sales and spinoffs intended to reduce its leverage and shore up its balance sheets. The company should raise more than $4 billion in 2014 from the moves, which will reduce debt by $3 billion. As a result of these divestments, the oil and natural gas company expects to see production hit by 2% this year, while also expecting its growth rate in 2015 to slow markedly.
Coal and iron ore miner Cliffs Natural Resources lost 3.3% today, as the stock took a hit from an analyst downgrade. Wall Street research firm Macquarie downgraded shares from a neutral to an underperform rating, just days after Cliffs Natural reported its first-quarter results. The company's coal business is hemorrhaging money, extracting coal for an average of $119.41 a ton, only to sell it for $88.61 a ton to its customers. As any kid with a lemonade stand can tell you, this is a broken business model.
Downbeat analysts were also the bane of NetApp's existence today, as the stock tumbled 2.8%. The data storage and solutions company has seen its stock price target lowered at two consecutive Wall Street firms: Wednesday, Piper Jaffray cut its target from $52 to $40 a share; yesterday, Wunderlich trimmed its target price from $44 a share to $34 a share. Each analyst seems to think growth is stagnating at the company, an opinion shared by a Raymond James analyst on Monday, who downgraded the stock on its falling market share.
Three stock picks to ride America's energy bonanza
Record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays, while historic amounts of capital expenditures are flooding the industry, will pad your investment nest egg. For this reason, the Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report, "The IRS Is Daring You To Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.