Today's 3 Worst Stocks
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The euphoria stemming from the Federal Reserve's decision not to taper its monthly asset-buying program yesterday wore off pretty quickly. Wall Street digested the news, bid stocks higher, and promptly sold off, all in a 24-hour window. Today, the S&P 500 Index dropped 3 points, or 0.2%, ending at 1,722. While the decline was by no means severe, three S&P components experienced sudden pullbacks as a direct result of the Fed's decision yesterday.
Regions Financial shed 4.2%, ending as one of the most severe decliners in the entire 500-stock index. As its name suggests, Regions is a regional bank, and regional banks had a rough go of it on Thursday. These smaller commercial banks make their money on the spread -- the difference between what they pay for deposits and what they charge to lend money. The Fed essentially said that interest rates would remain low for the foreseeable future, putting a strain on the earnings prospects for Regions.
KeyCorp shares lost 3.9% as Wall Street went through a similar line of thinking with the money center bank. The Cleveland-based bank can look forward to an unknown amount of time where its margins won't be going much higher, a prospect that had driven shares of KeyCorp up 37% in 2013. Now investors have to swallow their pride and wait until the next Fed meeting for any changes in the stimulus program.
Lastly, Newmont Mining dropped 3.5%. The company, which primarily mines for gold and copper, jumped an impressive 8.2% yesterday on the Fed announcement, which would send the price of gold up more than 4%. The precious metal's largest single-day gain since 2009 was a godsend for Newmont yesterday, but investors pared back their optimism on Thursday, acknowledging that the 8% jump might have been a little extreme.
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The article Today's 3 Worst Stocks originally appeared on Fool.com.
Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.The Motley Fool owns shares of KeyCorp. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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