3 Plunging Stocks Defy the Dow

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After last week, the worst of 2012, finished with a resounding thud, today's mixed market performance was decidedly less awful. However that didn't stop a number of stocks from burning investors with significant underperformance.

With that in mind, let's see how the major are fared today and then take a closer look at three stocks making news.

Index

Gain / Loss

Gain / Loss %

Ending Value

Dow Jones Industrial Average (INDEX: ^DJI) 71.820.56%12,921.41
Nasdaq(22.93)(0.76%)2,988.40
S&P 500(0.69)(0.05%)1,369.57

Source: Yahoo! Finance.


Last week, a number of macro events helped push a roaring market looking for a sell-off down the proverbial stairs. We had the Federal Reserve's wavering commitment to another round of stimulus combined with dismal job numbers, rising unemployment claims, and China's report of GDP growth well beneath expectations. With no malaise-jolting events today changing that story, it's no surprise we saw such a mixed performance.

Apple (NAS: AAPL) , the largest publically traded company, made its sheer size known on the Nasdaq, as its 4.2% drop help push the index sharply down. Apple's remarkable run continued into 2012, but shares shed 10% of their value a week after hitting all-time highs. Analysts cite concerns over rumors like a mini-iPad that could cannibalize sales or a wireless carrier's iPhone subsidy cut, but the recent sell-off is probably nothing more than profit-taking on a stock that may have gotten slightly ahead of itself.

Speaking of companies that went on a run, natural-gas engine maker Westport (NAS: WPRT) saw shares hit $50.19, before starting a three-week slide to $33.47, including today's 11% decline. Westport is in the unique position of profiting from persistently low natural-gas prices as the trucking industry switches its fleet to take advantage of the savings versus diesel fuel. A speed bump may have just appeared, though, as Cheniere Energy (ASE: LNG) received federal approval to build the country's first LNG export facility. Natural-gas prices are significantly higher in the rest of the world, making exporting the commodity a lucrative endeavor. However, if LNG is no longer trapped in North America, domestic prices will rise, potentially hurting Westport's value proposition.

Health-care stocks Halozyme Therapeutics (NAS: HALO) and Baxter had an even worse case of the Mondays. After disclosing that the FDA requested more data for drug candidate HyQ, shares of Halozyme plunged 24%, while the larger and more diversified Baxter dropped a mere 6%. The agency has questions surrounding long-term use of the immune-system treatment, questions that will cost time and money to sort out, leading to a delay in the approval process.

It's not clear exactly what the FDA expects, making it a little early to declare Halozyme's steep sell-off a buying opportunity, even if shares are sitting back where they were last October, when the hype really kicked into gear. Also, dilution is a concern, but Halozyme has nearly $53 million in the bank and burned through about $35 million last year, so the small biotech should be able to hold out for a little while. Baxter remains the safer play of the two, and investors waiting for the strong cash-flow generator to regress toward the middle of its trading range have their opportunity.

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At the time this article was published David Williamsonholds no position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Westport Innovations and Apple.Motley Fool newsletter serviceshave recommended buying shares of Apple and Westport Innovations and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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