Why Exelon Corporation, NextEra Energy, Inc., and Tyson Foods Inc. Are Today’s 3 Worst Stocks

The stock market closed three hours early today ahead of the Fourth of July holiday tomorrow. That didn't stop investors from sending both the Dow and the S&P 500 Index (SNPINDEX: ^GSPC  ) to all-time highs in a hurry on the heels of a stunningly resurgent jobs market. The U.S. Labor Department's monthly nonfarm payrolls showed that the economy created a seasonally adjusted 288,000 jobs in June, a figure so comically far above the 211,000 consensus expectation, it made the economists responsible for the lowball forecast look downright silly. Looking even sillier were shares of Exelon Corporation (NYSE: EXC  ) , NextEra Energy, (NYSE: NEE  ) , and Tyson Foods (NYSE: TSN  ) , which each somehow managed to fare miserably as stock markets hit all-time highs, and Americans literally prepare to jubilantly launch fireworks, grill out, and enjoy life.

Unfortunately for today's three laggards, they hail from a sector that actually tends to suffer when investors are slapping each other on their backs, and stock markets are roaring to record highs. That sad-sounding sector, of course, is the utilities sector. Do you know what percentage of S&P 500 stocks advanced today? Well, 80%. Eighty percent. Care to guess how many of the S&P's 10 worst performers were utilities stocks today? All 10. Every last one of the worst performers was a utility stock. Exelon shares ended as one of Thursday's more pronounced decliners, dropping 1.8%. So why was Wall Street so down on Exelon today? Sure, it's dealing with some fallout from Midwest storms earlier this week, and Hurricane Arthur won't do it any favors; but it's one of the largest utilities in the country, rewarding investors with a 3.4% annual dividend yield to boot!

But if chunky dividends and large market caps were the only things investors wanted, shares of $42 billion electric utility company NextEra Energy wouldn't have lost 1.5% on Thursday. The concern with NextEra Energy, Exelon, and utilities stocks, in general, in a clearly improving economy, revolves around the fear of higher interest rates. The momentous job growth in June put the unemployment rate at 6.1% -- its lowest level in nearly six years -- and capped off a five-month job-creating binge that was last matched in 2006. You can bet this unexpected strength has the Federal Reserve thinking about when it should raise interest rates again -- an act that would impair the ability of utilities like NextEra and Exelon to keep paying fat dividends.

It takes a stronger person than I to say no to some food like this. Source: Tyson Foods

While it's true that the day's worst stocks were all utilities, Tyson Foods deserves special mention for underperforming with the worst of 'em, as the mere meat-packing giant that it is. Tyson Foods, which produces all sorts of poultry, beef, and pork products, shed 1.2% on Thursday. You've likely seen the brand plastered all over your local grocery store for years, but Tyson has grander ambitions: It wants to take a bite out of Jimmy Dean. As of yesterday, the company did just that, snapping up Hillshire Brands -- which also makes Ball Park hot dogs -- for $7.7 billion. While a plan to acquire an iconic hot dog brand in the days before the Fourth of July isn't beyond the dexterous financiers of Wall Street, Tyson's Hillshire deal won't officially close until late September.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3018001, ~/Articles/ArticleHandler.aspx, 8/30/2015 4:21:30 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

John Divine

Fool since 2012, unique fingerprints since birth. Age 7: Put lifetime savings ($18.37!) in the bank, became disillusioned with low interest, and a fascination with the stock market was born.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^GSPC $1988.87 Up +1.21 +0.06%
S&P 500 INDEX CAPS Rating: No stars
EXC $31.40 Down -0.32 -1.01%
Exelon CAPS Rating: ***
NEE $101.82 Down -0.44 -0.43%
NextEra Energy, In… CAPS Rating: *****
TSN $42.62 Up +0.38 +0.90%
Tyson Foods, Inc. CAPS Rating: *****