Apparently in 2012, the stock market can also go down. After a torrid start to the year, the markets posted a slight drop over the past week. In the U.S., investors cheered some better-than-expected economic data, including another drop in initial unemployment claims. However, by week's end, most eyes were fixed on the situation in Greece, where riots rocked the capital as the prime minister pushed another round of austerity measures aimed at securing the next slug of bailout funding. If Greece doesn't meet the demands of other eurozone leaders, the country may be left to default next month, when its bonds come due.
By the time the dust had settled, the Dow Jones Industrial Average (INDEX: ^DJI) had fallen 0.5%, while the broader Russell 3000 shed 0.4%. The majority of the Russell 3000 sectors were in the red, but a few finished with some more serious losses.
The 3 Worst-Performing Sectors
Russell 3000 Sector
Weekly Price Change
Month-to-Date Price Change
Source: S&P Capital IQ. Weekly price change is Feb. 3-Feb. 10. Monthly price change is Jan. 31-Feb. 10.
Sometimes you feel like a nut, and, well, sometimes you feel like you just got hit by a walnut-shaped sledgehammer. For snack-food slinger Diamond Foods (NAS: DMND) , it was most definitely the latter this past week, as the company announced that the months-long investigation into its accounting practices uncovered some pretty rotten walnuts -- or, at least, accounting practices related to its walnuts. It turns out that management may have been manipulating payments to walnut growers to give investors a better show. The board gave the CEO and CFO a curt au revoir and said the company will restate financials for 2010 and 2011. But don't hold your breath for sunnier skies quite yet -- the fallout from the scandal is still in the early innings, and the company is on the verge of losing its deal to buy Pringles from Procter & Gamble.
Meanwhile, though Roomba maker iRobot (NAS: IRBT) showed investors expectation-topping results for the past quarter, its outlook for the year ahead caused the stock to short-circuit. After notching $1.44 in per-share earnings for 2011, the company said that 2012's tally will be closer to $0.85. Not only is that a precipitous 41% year-over-year drop, but it also badly whiffs on the $1.45 that Wall Street was estimating. iRobot has been a great stock to own for years, but as my fellow Fool Alex Planes noted "it's a growth stock only so long as it keeps, well, growing."
The 3 Worst-Performing Russell 3000 Companies
Weekly Price Change
Source: S&P Capital IQ. Weekly price change is Feb. 3-Feb. 10. Includes only companies with market caps of $250 million or more.
Also among the week's worst performers were OPNET Technologies (NAS: OPNT) and True Religion Apparel (NAS: TRLG) . Unlike iRobot, neither OPNET nor True Religion managed to even top estimates for the past quarter. In OPNET's case, the company delivered $0.26 in per-share earnings, which was $0.03 short of analysts' views. In addition, at the midpoint, management's $0.20 to $0.32 earnings-per-share range for next quarter also significantly missed Wall Street's target. By week's end, the stock had lost 17%.
Meanwhile, True Religion was looking anything but fashionable as its fourth-quarter EPS missed analysts' estimates by a hefty $0.09 even though the company saw strong growth from its brick-and-mortar stores. The company's guidance, however, was even uglier. At the midpoint of its EPS range, management is projecting 2% growth for 2012. On its own that's nothing to cheer, but when you add that management's view was nearly 20% below Wall Street's, well, that's just abysmal. By the time investors had finished with their alterations on Friday, the stock had a 27% loss for the week.
That's it for the weekly laggards recap. Looking to turn the tides and find some strong outperformers in the year ahead? The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access -- it's free.
At the time thisarticle was published The Motley Fool owns shares of Amyris.Motley Fool newsletter serviceshave recommended buying shares of Procter & Gamble and iRobot. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.
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