Investors were given an early Christmas present as U.S. equity markets bounced back last week. Reports from Europe continued to whipsaw global markets, but this time for the better. A successful debt auction in Spain was behind much of the week's optimism as bond buyers appeared to become more confident that the country will be able to meet its debt obligations. Meanwhile, in the U.S., economic data helped stoke the positive sentiment. Housing numbers largely came in better than expected, and initial unemployment claims continued to fall.
The Dow Jones Industrial Average (INDEX: ^DJI) jumped 3.6% during the week, while the broader Russell 3000 advanced 3.7%. However, not all of the market's sectors managed to keep up with the broader surge.
The 3 Worst-Performing Sectors
|
Russell 3000 Sector |
Weekly Price Change |
Month-to-Date Price Change |
|---|---|---|
| Information Technology | 2.1% | (0.3%) |
| Consumer Staples | 3.2% | 2.6% |
| Telecommunications | 3.3% | 2.8% |
Source: S&P Capital IQ. Weekly price change is Dec. 16-Dec. 23. Monthly price change is Nov. 30-Dec. 23.
The health-care sector as a whole performed better than the broad market, but that didn't help Targacept (Nasdaq: TRGT). The company has been developing a depression treatment with drug giant AstraZeneca (NYSE: AZN) targeted at patients for whom standard antidepressants didn't work. For the second time in as many months, Targacept said that the drug failed in a late-stage efficacy trial. In response, investors bolted for the exits.
Alaska Communications (Nasdaq: ALSK), meanwhile, was crushed by Mr. Market after the company slashed its dividend payout. Last Wednesday, the company announced that it's paying shareholders a $0.05-per-share dividend for the quarter, down drastically from the $0.22 level that the dividend was at previously.
The 3 Worst-Performing Russell 3000 Companies
|
Company |
Weekly Price Change |
|---|---|
| Targacept | (29.5%) |
| Alaska Communications | (26.7%) |
| Primus Guaranty | (24.5%) |
Source: S&P Capital IQ. Weekly price change is Dec. 16-Dec. 23.
Also among the slumping stocks this week were Eastman Kodak (NYSE: EK) and Oracle (Nasdaq: ORCL). The struggling Kodak saw its shares smashed early last week after reports swirled that the former camera king was having trouble shoring up its balance sheet. To bolster its cash position, the company has been in discussions with hedge funds even as it seeks to sell some of its patent portfolio. An article in The Wall Street Journal raised concerns that the funding may not be enough or come soon enough to save the company from bankruptcy.
The $131 billion Oracle, meanwhile, saw its stock bathed in an unusual amount of red after the company reported quarterly results that were short of Wall Street's expectations. The tech behemoth missed earnings estimates by $0.03, which encouraged an 11% sell-off for the week.
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