So far, 2012 has been a swell year for investors, as stocks have taken off. Over the past week, we saw markets cheering a proposal by the International Monetary Fund to raise $600 billion in new funds to help it address the eurozone debt crisis. Strong earnings results from financial companies such as Goldman Sachs and Bank of America as well as tech bellwethers such as IBM and Intel also helped drive stocks forward.
For the week, the Dow Jones Industrial Average (INDEX: ^DJI) tacked on 2.4%, while the broader Russell 3000 added 2.1%. Earnings in specific sectors had a lot to do with sector performance this week, but broadly, defensive sectors had a tough time keeping up with the rest of the market.
The 3 Worst-Performing Sectors
|
Russell 3000 Sector |
Weekly Price Change |
Month-to-Date Price Change |
|---|---|---|
| Utilities | (0.1%) | (0.6%) |
| Telecom | 0.1% | 0% |
| Materials | 0.5% | 2.4% |
Source: S&P Capital IQ. Weekly price change is Jan. 13-Jan. 20. Monthly price change is Dec. 30-Jan. 20.
Though the utility sector was the worst performer this week, most utilities didn't fare nearly as badly as GenOn Energy (NYSE: GEN). The Houston-based electricity generator hasn't exactly been an investor favorite as it is, and the stock has been clobbered over the past year. This week, though, the shares were nailed by a downgrade to sell from UBS and an initial rating of underweight from Morgan Stanley -- on the same day.
As poorly as GenOn shares fared, biopharma Achillion Pharmaceuticals (Nasdaq: ACHN) managed to have an even worse showing. The stock was hit by a very critical article on Seeking Alpha that reviewed some of the recent action around hepatitis C drug developers and then laid the smackdown on Achillion, saying that the company is set to be left in the dust by its competitors because of types of hep-C treatments that it's working on. Shares fell 11% for the day following the publishing of the article.
The 3 Worst-Performing Russell 3000 Companies
|
Company |
Weekly Price Change |
|---|---|
| Achillion | (23%) |
| R.R. Donnelley | (15%) |
| GenOn | (15%) |
Source: S&P Capital IQ. Weekly price change is Jan. 13-Jan. 20. Includes only companies with market caps of $250 million or more.
Also among the week's worst performers were Johnson Controls (NYSE: JCI) and Fulton Financial (Nasdaq: FULT). It's earnings season, and that means investors need to be ready to dance along with the market as it alternately celebrates and slams stocks based on whether they're pennies above or pennies below Wall Street analysts' estimates. For Johnson Controls, the big reveal showed that it was pennies short for its fiscal first quarter. Earnings per share of $0.60 limboed analyst expectations of $0.62. Worse still, the company cut its full-year profit outlook from a range of $2.85 to $3 per share to a range of $2.70 to $2.85.
For Fulton Financial, it was a similar fate. Earnings per share clocked in at $0.18, which was a 12.5% increase from the fourth quarter of 2010, but it was also $0.02 shy of the target that Wall Street had set. By the time the smoke cleared for the week, Fulton's stock had shed just north of 10%.
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