Today's 3 Worst Stocks
Today, we saw just how much influence Fed Chairman Ben Bernanke wields over Wall Street, as a few simple words sent indexes to new highs. Markets had been unsure about when the current $85 billion monthly asset-buying program would begin to slow, but Big Ben's vow that "accommodative monetary policy" would continue "for the foreseeable future" was the only specific needed to revitalize stocks. The S&P 500 Index soared 22 points, or 1.4%, to close at 1,675, a record-high close. But even a sixth straight day of gains couldn't lift today's laggards.
Oil drilling contractor Nabors Industries ended as one of the worst performers for the second straight day Thursday, as fallout from the company's profit warning on Tuesday continued. Rough weather conditions in the quarter, combined with decreasing rig rentals and a struggling service business, will likely cause an earnings miss, according to the company. Shares fell 2.6% today.
Southeast bank Regions Financial slipped 2.5% today, as regional banks suffered following Bernanke's comments. The Fed's continuing quantitative easing efforts imply that interest rates will remain pretty low for the near future, and that could be especially detrimental to the lending profits of smaller banks. Regions shareholders have been amply rewarded for their patience so far this year, enjoying a nearly 40% surge in the stock price, so Thursday's slip is relatively minor for investors with longer time horizons.
Lastly, shares of KeyCorp lost 1.9% today; KeyCorp shares have posted returns nearly identical to Regions' in 2013, having risen 37% thus far. The stock also trades at just under 13 times earnings, and pays around a 2% dividend, so it's a bit of a stretch to say that shares look way overvalued. Shareholders will get a better idea of whether today's sell-off was ill-advised next week, when the bank reports its second quarter results.
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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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