Today's 3 Worst Stocks


No matter the market, there will always be losers -- a few lagging disappointments holding back a Wall Street rally or several big losers leading a bearish day. The S&P 500 moved on up more than 0.6% on the day, but several notable big names helped to weigh down the index and make investors pull their hair out in frustration. Here are the three worst stocks today that you need to know about -- from industrials to freight delivery, these stocks put a dent in Wall Street's Wednesday.

Retreat of the economic bellwethers
One of the biggest names on the stock market dropped into the red today, as Caterpillar took a hit. Shares weren't down by any horrific amount -- the top manufacturing stock lost 1.5% on the day -- but the losses were enough to rank Caterpillar among the worst notable laggards. The company reported that sales to dealers slumped by 13% over the past three months, including a withering 26% fall in sales to the Asia-Pacific region.

What's behind the bad news? Caterpillar's still struggling with high inventory, particularly in China, where the second-leading economy's sluggish growth lately has hurt industrial stocks everywhere. Chinese leaders set an economic growth target of 7.5% in 2013, but even though the country's not in bad shape, Caterpillar and its rivals are hurting. This stock's the worst performer on the Dow year to date, and investors have to be wondering how long it will be before it gets back on track.

It's not a good sign when one economic bellwether like Caterpillar's in the red, but rival Deere also took a hit today. Shares of the manufacturer fell 3% after a Wells Fargo analyst downgraded the stock from "market perform" to "underperform." Why the downgrade? The analysis anticipated that falling corn prices in the near future would hurt demand for Deere's machinery; the company relies heavily on agricultural market's purchase of its products.

As with Caterpillar, however, sluggish global growth in the world's leading economies probably isn't helping Deere, either.

Rounding out three usually-solid stocks taking a hit today, shares of FedEx were walloped to the tune of 6.9% today, ranking it as the worst stock on the S&P 500 by far. Once again, we can pin much of the blame on Asia: FedEx announced that it will cut flight capacity to and from the region after it reported third-quarter earnings that plummeted 31% and missed analyst projections. FedEx is looking to slash costs as customers move toward cheaper means of transportation, and cutting its express business in Asia should help.

Will it be enough for FedEx to turn things around next quarter? Given that the company expects lackluster results from its international business to continue, perhaps not.

Is there hope for Caterpillar in 2013?
Caterpillar took a hit today, and while it's slogging through the muck in 2013, this company's a proven winner in the past. But can it beat today's lousy economic conditions? This manufacturing colossus is the market share leader in an industry in which size matters, and its quality products, extensive service network, and unparalleled brand strength combine to give it solid competitive advantages. Read all about Caterpillar's strengths and weaknesses in The Motley Fool's brand-new report. Just click here to access it now.

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Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends FedEx and Wells Fargo and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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