Some days, it's tough to find any stocks that lose ground. Wednesday was one of those days, because investors were excited about the beginning of earnings season in the financial industry as well as signs of favorable macroeconomic conditions in the red-hot emerging market of China. Once again, the stock market is nearing a moment of truth, as today's gains of more than 1% for the Dow and S&P 500 point to the possibility of another challenge toward all-time record highs for the U.S. market.
Still, even with the overall good cheer on Wall Street Wednesday, some stocks missed out on the rally. Among them were Reynolds American (NYSE: RAI), Tyson Foods (NYSE: TSN), and Harmony Gold (NYSE: HMY).
Reynolds American was down more than 4% on a tough day for tobacco stocks generally. Some reports pointed to nervousness about the potential for impending regulations on electronic cigarettes and other alternative products to weigh on growth prospects, especially if the specific regulatory guidance puts a disincentive on innovative products. Another possibility is that many investors see Reynolds American and other tobacco makers as a relatively safe, low-volatility play, and if the stock market is starting to move higher again, it's time to ride riskier stocks higher rather than sticking with a conservative alternative in the tobacco industry.
Tyson Foods also fell 4% after getting a downgrade from analysts at Credit Agricole. To be fair, the downward movement in the analyst's opinion was only from Buy to Outperform, suggesting the meat producer still has some room for further upside. Investors have gotten a lot more excited about Tyson's earnings prospects for the just-ended quarter and for the full year, pushing both figures higher by roughly 10% over the past few months. Given how well the stock has performed, having nearly doubled from 52-week lows, Wednesday's pullback didn't put a huge dent in Tyson's returns over the long haul.
Finally, Harmony Gold was down 5%. The South African gold miner has done extremely well lately, rising close to levels not seen since 2013. Not only have gold prices finally started to bounce back recently, but a long-awaited rebound in the value of the South African rand compared to the U.S. dollar also gave Harmony a competitive advantage over some of its peers in other countries. Yet today's decline in gold prices and rise in the dollar's value against the rand had a double-whammy effect on Harmony stock, highlighting the vulnerability of international miners in the current environment. As long as commodity markets remain in turmoil, Harmony Gold investors will have to find ways to navigate an ever-changing environment while still remaining profitable.