After a long streak of weekly gains, the major U.S. indexes fell this week as investors re-evaluated just how long they'd let stocks rise before cashing in some of those gains. Contributing to the pessimism during the week were lackluster economic reports out of China, leading investors to wonder whether growth for that global powerhouse may be slowing faster than expected. On the other hand, leading economic indicators in the U.S. rose faster than anticipated, while initial jobless claims fell more than expected.
By the time the dust had settled on Friday, the Dow Jones Industrial Average (INDEX: ^DJI) had shed 1.2%, while the broader Russell 3000 lost 0.5%. But while the broad losses weren't all that bad, for some stocks, the week was a bloodbath.
The 3 Worst-Performing Sectors
|
Russell 3000 Sector |
Weekly Price Change |
Month-to-Date Price Change |
|---|---|---|
| Energy | (2.8%) | (2.4%) |
| Industrials | (1.8%) | 0.8% |
| Materials | (0.9%) | 0.1% |
Source: S&P Capital IQ. Weekly price change is March 16-March 23. Monthly price change is Feb. 29-March 23.
Aptly named fuel-cell maker FuelCell Energy (Nasdaq: FCEL) saw its shares get hammered after the company announced that it had sold 20 million new shares for a price that was 15% less than the previous closing price. Investors rarely react well to new stock sales, because not only are they sometimes sold at a lower-than-market price -- as was the case here -- but they also reduce the profit that each share can lay claim to. Not that the latter is as much of a concern for an unprofitable company like FuelCell.
The company told investors that it plans to use the new capital for "growth capital and general corporate purposes." For a cash-flow negative company like FuelCell, the rough corporate-speak translation there is, "We're using this money to keep the lights on."
In a much more established but badly struggling industry, KB Home (NYSE: KBH) took it on the chin after it reported fiscal first-quarter results. While there were signs of progress at KB -- its net loss decreased from $115 million in the previous year to $46 million -- the homebuilder's order book declined 8%. The weak orders sparked concerns that the recent optimism about the housing market may be a little premature.
The 3 Worst-Performing Russell 3000 Companies
|
Company |
Weekly Price Change |
|---|---|
| KIT Digital | (27.7%) |
| KB Home | (19.4%) |
| FuelCell Energy | (15.2%) |
Source: S&P Capital IQ. Weekly price change is March 16-March 23. Includes only companies with market caps of $250 million or more.
Also among the week's worst performers were Krispy Kreme Doughnuts (NYSE: KKD) and First Solar (Nasdaq: FSLR).
Krispy Kreme's stock gave investors a bellyache when earnings results were apparently not nearly sweet enough for them. The results of the doughnut maker's fourth quarter appeared positive -- revenue rose 11% from the previous year, while adjusted earnings per share of $0.06 matched analysts' estimates. Even better, the company forecasted full-year results above Wall Street's expectations. Investors were obviously hungry for even more, though, as they knocked shares down 12% for the week.
For First Solar, the week's disappointment came as new U.S. government tariffs on Chinese solar imports weren't as high as expected. For U.S. solar companies such as First Solar and SunPower, the concern is that the tariff of 2.9% to 4.73% wouldn't have the impact that investors had hoped for. However, as my fellow Fool Travis Hoium pointed out, more tariffs are still on the way, and furthermore, tariffs may not have much of an impact on the industry anyway. Nevertheless, First Solar shed 10% on the week.
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