The Dow broke all kinds of records in February—none of them records stock market investors want to see broken.
All within the month, the Dow saw its biggest one-day point drop in history and its biggest weekly decline in more than two years, while stocks saw their biggest declines since 2009—and it’s not over yet as we head into a new kind of March Madness.
The Number One loser was Walmart, which lost 15.6 percent in February overall.
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The chart pretty much says it all. While inflation and interest rate hikes fears have ruled the month, Walmart’s slowing sales reported for the fourth quarter of 2017 sparked off the rapid decline.
In its battle for online retail dominance with Amazon, Walmart appears to have lost. Last year, things were looking much brighter for this stock, and the retailer had investors convinced that it could take on Amazon with online sales. But Q42017 earnings painted a different picture—one of slowing online sales growth. That’s where Walmart lost its mojo. What, after all, is the point?
On its worst day, 20 February, Walmart was the biggest drag on the Dow, accounting for one-third of the 255 points the Dow lost that day. For Walmart, it meant a $31-billion market value sell-off.
And that was just one day in a month that was bad for many.
The bad news keeps coming in for Walmart. On Friday, Oppenheimer downgraded the stock from “outperform” to “perform”. They’re anything but excited at this point.
But Walmart wasn’t the only February drag on the Dow: The Number Two spot goes to Exxon Mobil (NYSE:XOM), which lost 13.2 percent for the month. Related: How Russia Attacked U.S. Energy Markets
Exxon tanked on earnings, too, just when 2018 was looking promising. And it didn’t just miss earnings estimates; rather, it missed them by a longshot. Earnings per share were $0.88--$0.15 off the target, and the 18-percent increase in revenue was $8 billion shy of estimates.
The Number Three spot was held unsurprisingly by General Electric (GE), one of the most unattractive stocks that’s been struggling at best for a year, with everyone thinking the bottom must be visible, though it never is.
And it didn’t help matters when Warren Buffett said he was “staggered” at GE’s “big time” financial lapses.
Losers four and five, Verizon and Chevron, lost 11.7 percent and 10.7 percent, respectively. Verizon’s banking on high-flying 5G announcements to claw its share price back up, and Chevron is hoping for an oil price miracle after it badly missed its earnings estimates.
The loser list for March is shaping up to be another Dow-dragging affair as well, with no respite in view; trade warmongering steel tariffs looming; inflation fears heightening and one of the most listened-to investors telling people to give up the ghost of stocks.
By Charles Benavidez for Safehaven.com
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