Please ensure Javascript is enabled for purposes of website accessibility

Today's 3 Worst Stocks in the S&P 500

By John Divine - Sep 24, 2013 at 7:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Political discord on Capitol Hill sends ripples through Wall Street. Three stocks in particular feel the pain today.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Let's put this out there: Our political leadership would have to be pitifully out of touch or willfully ignorant of the consequences if it decided to let the government shut down.

So let's not rule it out..

The fact that a government default is still even a conceivable outcome of the debt-ceiling debate is slowly ratcheting up anxiety levels on Wall Street, as it should. Sadly enough, a default is a real possibility as the October 1 deadline approaches. The S&P 500 Index (^GSPC -0.61%), as a result, did what you'd expect it to do: It fell, losing 4 points, or 0.3%, ending at 1,697.

The most severe decliner in the benchmark S&P index was open-source software powerhouse Red Hat (RHT), which plummeted 11.7% after disappointing quarterly results. Monday's announcement saw the company outperform in the fiscal second quarter, but, as the saying goes: "Investors buy the future -- the past is not for sale." That future was too overcast for Wall Street, and while some analysts expected a 14% growth in sales to new customers, that figure -- known as "billings" -- came in at just 8%. 

Carnival (CCL -5.18%) was the index's second-biggest laggard on Tuesday, slumping 7.7% as the cruise ship operator felt the wrath of investors. Its earnings in the most recent quarter were 30% below those of the same period last year, and with a very public excavation of the wrecked Costa Concordia happening right now, Carnival's PR team must be working overtime. 

Finally, J.C. Penney (JCPN.Q), while not a literal shipwreck, will make for a fine business school case study one day. The study will ask questions like "What happens to a retailer's stock when it allows an impatient hedge fund manager to start calling the shots?" and "What happens when a retailer decides to do away with sales altogether?" and "Are customers forgiving in these circumstances?" Today's 3.7% decline should be a solid gauge of how stockholders feel about the matter. 

Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool has no position in any of the stocks mentioned, either. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,278.83 (-0.61%) $-26.37
Red Hat, Inc. Stock Quote
Red Hat, Inc.
RHT
J. C. Penney Company, Inc. Stock Quote
J. C. Penney Company, Inc.
JCPN.Q
Carnival Corporation Stock Quote
Carnival Corporation
CCL
$10.61 (-5.18%) $0.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
402%
 
S&P 500 Returns
129%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/17/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.