This Week's Leaders and Laggards
After a wild third quarter, the market seems to have popped a few Peptos and stabilized at least a little bit this week, although a late Friday drop sent the S&P 500 lower for the week. With little macro data news, investors turned their focus overseas (to Europe's debt crisis) and on third-quarter earnings season, which kicks off in just over a week.
Company-specific news is mostly what drove stocks this week. Here's a closer look at some of the S&P 500's most notable movers.
Still Getting Off the Mat
A few companies continued to struggle this week as expectations for the third quarter were revised. These three companies led the laggards this week:
Company | Sector | Sept. 23 | Sept. 30 | Performance |
Advanced Micro Devices (AMD) | Technology | $6.17 | $5.08 | (17.7%) |
MEMC Electronic Materials (WFR) | Technology | $6.11 | $5.24 | (14.2%) |
Netflix (NFLX) | Services | $129.36 | $113.27 | (12.4%) |
Source: Finviz.com
The chips are down: Chipmakers came under pressure this week when AMD lowered guidance for the third quarter and Micron Technologies (MU) reported a loss for the fiscal fourth quarter. AMD is still expecting revenue growth but at a more modest rate of 4% to 6%. So far this week, shares have fallen 17.7%.
Solar burn: Any company involved in the solar industry had a rough time this week, and MEMC Electronic Materials was no different. Polysilicon prices continue to be under pressure, which helped send MEMC down 14.2% for the week. There doesn't appear to be much light at the end of the tunnel for suppliers, which are being squeezed by lower module demand and more vertical integration at solar manufacturers.
Flixbuster sequel: The mess at Netflix continued this week as investors bet against the company's plan to split into streaming and DVD businesses. Shares fell 11% yesterday alone, and investors who were once giddy about Netflix's future have turned into the company's biggest haters.
It's Good To Be On Top
On the other end of the spectrum, some companies bucked the bear trend and rose. Several financial stocks, in particular, got a nice lift. Minor steps toward allaying the market's concern over Europe's debt problems led to some financial stocks bouncing higher this week. Here are three of the notable movers.
Company | Sector | Sept. 23 | Sept. 30 | Performance |
Genworth Financial (GNW) | Financial | $5.09 | $5.74 | +12.8% |
Sears Holdings (SHLD) | Services | $52.55 | $57.52 | +9.5% |
Goodyear Tire & Rubber (GT) | Consumer goods | $9.86 | $10.07 | +2.1% |
Source: Finviz.com
Fizzy financials: Genworth Financial and Aflac traded significantly higher this week as the market's concerns about Europe took a temporary break. Germany's Parliament voted to expand a bailout fund for Europe's most troubled countries. This seems to be an up-and-down sector every week, but this week Genworth Financial climbed 12.8%.
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Loving the leases: Every few quarters, the real estate value argument is recycled with Sears Holdings as a way to unlock value. This week, that thesis may have turned into more of a reality as the company opened up most of its locations to leases from interested retailers. Investor Eddie Lampert has not been able to turn the retailer around and may be trying to cash out any value that's left. So far, investors like what they see.
Big wheels turning: This week, reports that China's auto market was seeing record demand sent Goodyear higher as tire makers expect to sell a record number of tires. Rubber prices also increased, but tire manufacturers should be able to pass on the increased cost to customers. J.D. Power estimates that global car and light commercial vehicle sales will rise 4% this year and 10% in 2012, so investors are trying to beat the rush into the sector.
One Eye on the Past, One Eye on the Future
The third quarter has been rough for most investors, but tomorrow starts a whole new quarter. Earnings season truly gets under way when Alcoa (AA) releases earnings on Oct. 11, and that's when we'll find out if this quarter's fears were truly justified. Something tells me there will be a lot of companies that will surprise investors on the upside.
Motley Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool and check out his personal stock holdings. The Motley Fool owns shares of Aflac. Motley Fool newsletter services have recommended buying shares of Netflix and Aflac, as well as creating a bear put spread position in Netflix.
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