Even after new home sales data for May absolutely blew out expectations, Wall Street was blase, selling off into the closing bell. With both the oil and gas and the materials sectors ending as two of the worst performers in the market, Pioneer Natural Resources Co. (NYSE:PXD), Cliffs Natural Resources (NYSE:CLF), and EOG Resources, (NYSE:EOG) had a rough go of it Tuesday. While the S&P 500 Index (SNPINDEX:^GSPC) lost 12 points, or 0.6%, to end at 1,949, the benchmark index actually added to an unusually long streak of low volatility. The S&P hasn't changed by more than 1% in any of the last 47 sessions, the longest such streak since 1995.
While Pioneer Natural Resources was literally the worst stock in the S&P today, plunging 4.8%, tomorrow will almost certainly see a reversal of fortune. The oil and gas explorer, along with only one other company (Enterprise Products Partners LP) was granted exclusive rights to export condensate oil abroad. The permission was given by the U.S. Commerce Department, according to a Wall Street Journal report that hit the wires after the stock market closed. Companies like Pioneer Natural Resources have been banned from exporting unrefined oil for the past 40 years, but that all changed Tuesday.
Cliffs Natural Resources has a monkey on its back. A monkey named Casablanca Capital, which brutally beats its host with PR blasts and demands for executive shakeups every chance it gets. Cliffs Natural Resources lost 4.3% today after the latest example of Casablanca's pugnacious verbal assaults. Casablanca, which owns about 5% of Cliffs, said that Cliffs' claim that Casablanca only plans on holding its shares for 18 months was a "complete fabrication." Casablanca went on to accuse members of Cliffs' Board of being so desperate to "cling to their thrones" that they will "say and do anything" to retain their positions.
The last of Tuesday's laggards, EOG Resources, also hails from the oil and gas business. The stock tumbled 3.7% today. EOG Resources, though it engages in other methods of energy extraction, uses fracking extensively in areas like the Permian Basin and the Eagle Ford and Bakken shales. In a company presentation this month, EOG said that there may be the equivalent of 1.3 billion barrels of oil in the Permian Basin. Great, right? Well, unfortunately, the quality of the Permian shale is degrading, making other plays more attractive, according to CEO Bill Thomas.