About two in every three stocks advanced in the stock market today, as investors cheered impressive U.S. industrial productivity in February. While February's 0.8% month-over-month uptick may not seem like much, it was the highest such advance in six months, and renewed confidence in the American auto industry in particular. Despite the rampant bullishness, every day has its losers, and Weyerhaeuser (WY -1.98%), Tesoro Corporation (ANDV), and Cabot Oil & Gas (CTRA -1.26%) finished at the bottom of the S&P 500 Index (^GSPC -0.19%). By day's end, the S&P was up 17 points, or 1%, to finish at 1,858.
Shares of Weyerhaeuser, a vertically integrated home builder and lumber supplier, lost 1.8% on Monday. Investors weren't too happy that U.S. manufacturing numbers did so well while the prospects for real estate disappointed. After a record-setting decline in the housing market index in February, the gauge hovered around its disappointing levels, going from 46 to 47. Numbers above 50 indicate that builders think the housing market is improving. Weyerhaeuser, which is both directly and indirectly reliant on real estate as a home builder and materials supplier, didn't take kindly to the news.
Oil refiner Tesoro Corporation shed 1.7% Monday, despite a lack of company-specific news. Refiners like Tesoro (and Cabot Oil & Gas, for that matter) rake in more proverbial dough when oil prices are falling. Refiners buy crude oil and, well, refine it, creating a cleaner and more desirable energy source for consumers. For Tesoro and its peers, the price of these refined products (like gasoline) don't swing as quickly as crude oil prices. This creates both a strength and a weakness, since falling oil prices will take some time to convert to lower prices at the pump, while higher oil prices won't translate immediately either.
It's interesting that Cabot Oil & Gas (CTRA -1.26%) should also find itself on this list, with its stock falling 1.7% Monday. Oil prices slipped today, approaching $98 a gallon, a trend that should ultimately be good for refiners and their margins. Ultimately the future of Cabot Oil & Gas, like Tesoro's future, is largely slave to the Brent-WTI spread, which is the price difference between similar types of oil in the U.S. and Europe. The larger this spread is, the more refiners stand to profit. The Brent-WTI spread has narrowed significantly in the past year, cratering nearly 60% over that period and crushing refiners' margins. The silver lining, of course, is that refiners stand to post big gains if the margins expand again, although that's a big if, and hardly an investible thesis.