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Alex Kimani

Alex Kimani

Writer, Divergente Research LLC

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Divergente Research LLC and Safehaven.com. 

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The 5 Worst S&P 500 Performers Of The Year

Sad

We are at the mid-point of the year, and a good time for investors to take stock of their portfolios and review market performance in general. The current year has not been very kind to stocks, with the broad-market benchmark having climbed a modest 4 percent in the year-to-date compared to twice as much at a comparable point the previous year. The industrial benchmark, the Dow Jones, has fared even worse after managing a paltry 0.3 percent gain.

The tech sector, however, has been a monolith of performance as evidenced by the 12.2 percent gain by the tech-heavy Nasdaq Composite and 13.6 percent by the Nasdaq 100.

There are several reasons why the nine-year-old bull market is showing obvious signs of fatigue, but top among them include rising interest rates, mounting geopolitical uncertainty and monetary tightening.

Without further ado, the brass tucks.

Here are top 5 worst performers in the S&P 500 in diverse sectors.

#1 Healthcare­: Incyte Corp. (NASDAQ:INCY)

YTD Return: -24.4%

A failed drug trial is largely responsible for Incyte Corp.’s sad tale. The Delaware-based biopharmaceutical research company has found itself on the ropes after a key failure in the first of a series of pivotal trials for its cancer drug, epacadostat. An initial combo trial involving epacadostat and Merck & Co.’s (NYSE:MRK) Keytruda was promising enough with 56 percent of melanoma patients showing durable tumor responses. A second trial involving epacadostat in isolation was able to show such a response from only 35 percent of patients thus casting a dark cloud over its long-term viability.

#2 Retail: L Brands Inc. (NYSE:LB)

YTD Returns: -39 percent

Victoria's Secret parent company L Brand’s shares have been hammered to the tune of nearly 40 percent, the worst for any S&P 500 stock so far this year. Investors have mostly been concerned with slowing sales and piling inventories at the company’s stores—a worrying sign that this once iconic brand might no longer be fashionable. Related: Controversial European Internet Law Rejected

Further, deteriorating foot traffic at Victoria’s Secrets’ stores have only compounded those fears since the apparel seller accounts for 60 percent of overall sales.

#3 Technology:Symantec Corp. (NASDAQ:SYMC)

YTD Returns : -23.1 percent

Shares of leading cybersecurity company Symantec have badly trailed the cybersecurity sector as evidenced by the 20-percent gain by the ISE Purefunds Cybersecuriy ETF (HACK). The shares tanked about 40 percent on the day the company announced that it had launched internal investigations into its accounting procedures that may lead to financial restatements. In other words, the company might be forced to adjust past financial reports—just the kind of uncertainty investors hate. The company’s Q4 2017 report was quite good though, with revenue increasing 10 percent to $1.22 billion, ahead of estimates at $1.19 billion, while adjusted EPS improved from $0.28 to $0.46, a healthy $0.39 beat.

#4 Industrial: Goodyear Tire & Rubber Co. (NASDAQ:GT)

YTD Returns: -25.4%

The California-based multinational tire manufacturing giant has been grappling with higher costs of the raw materials it uses to make its tires. Investors have chosen to give the shares a wide berth after net income for the last quarter dropped to $75 million compared to the $166 million it posted during last year’s corresponding quarter. That was despite revenue increasing to $3.83 billion from billion previously.

#5 Energy: Cabot Oil & Gas (NYSE:COG)

YTD Returns: -17%

Crude oil prices have been red-hot this year climbing 15 percent since January. The same, however, cannot be said of gas prices after prices slumped nearly 20 percent. Unfortunately, Cabot makes most of its money selling gas from the Marcellus Shale. The company, though, has been using its cash reserves to buy back shares, which could help support the stock considering how buybacks have benefited many of its peers in the past.

By Alex Kimani for Safehaven.com

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