Please ensure Javascript is enabled for purposes of website accessibility

Today’s 3 Worst Stocks in the S&P 500

By John Divine - Jan 23, 2014 at 7:01PM

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

These three laggards stood out as some of the worst performers in the stock market 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.

In what amounted to the first day of widespread bearishness of the young year, investors sold off heavily in the stock market today. Seizing on data from China showing a contraction in its manufacturing sector, Wall Street was easily spooked and dismissed corporate America's earnings -- which have largely been in line -- as an afterthought. The S&P 500 Index (^GSPC 1.93%) fell 16 points, or 0.9%, to end at 1,828. 

Johnson Controls (JCI 2.72%), the auto-parts maker, slumped 4.4% today, even though it announced earnings that exceeded expectations in the most recent quarter. Why would Wall Street, in its infinite wisdom, go out of its way to punish a company like Johnson Controls, fresh off a great quarter? Because you're buying a company's future -- not its past -- when you invest in any particular stock. And Johnson Controls painted a dimmer view of the future than shareholders would've liked. But it's hard to say that a 45% yearly bump in net income, which is what the company expects to achieve in its next quarter, demonstrates a floundering company. Clearly expectations were unreasonable in their own right.

No stranger to this list, Cliffs Natural Resources (CLF 4.18%) lost 4.3% today. Its most recent troubles stem from a Morgan Stanley note highlighting potential risks in a joint project with a China-based steel company, Wuhan Iron & Steel. The two companies are jointly developing a Bloom Lake iron ore mine in Quebec, but Wuhan has apparently begun slowing its payments to Cliffs Natural Resources, sparking fears that it could pull out of its partnership altogether. It certainly doesn't help that this news broke on the same day China showed weakness in the manufacturing sector, so keep an eye on China-dependent companies moving forward. 

Finally, Pitney Bowes (PBI 3.64%), which provides various goods and services to businesses to facilitate communication, saw shares fall 3.7% today. If you're a big believer in "reversion to the mean," then today's decline may be indicative of something larger. Stock in the company, fresh off a 120% return that made it one of 2013's best S&P performers, is down marginally so far in 2014. Pitney Bowes is a volatile stock and consumer goods was a beleaguered sector on Thursday, so its slump may simply be due to widespread bearishness and stymied momentum.

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. 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
$4,202.16 (1.93%) $79.69
Pitney Bowes Inc. Stock Quote
Pitney Bowes Inc.
PBI
$3.27 (3.64%) $0.12
Cliffs Natural Resources Inc. Stock Quote
Cliffs Natural Resources Inc.
CLF
$19.82 (4.18%) $0.80
Johnson Controls International plc Stock Quote
Johnson Controls International plc
JCI
$55.58 (2.72%) $1.47

*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
373%
 
S&P 500 Returns
122%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

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.