Mar­ket’s down­turn sharper in these ar­eas

Lots of stocks al­ready deep into bear ter­rain

USA TODAY Weekend Extra - - MONEY - Adam Shell

Dam­age as­sess­ments from the re­cent mar­ket slump are rolling in, and stock losses are more grue­some and big­ger than they ap­pear on the sur­face.

The down­fall of many in­di­vid­ual stocks has been far more siz­able than the broad stock mar­ket’s dis­com­fort­ing but man­age­able 7 per­cent drop from its late Septem­ber high, data show.

Big-time trou­bles for the strug­gling bull mar­ket lurk in the deeper pool of com­pa­nies that make up the Stan­dard & Poor’s 500 stock in­dex. Shares of many of them are in full re­treat, with 165 com­pa­nies, or one-third of the in­dex, now in bear mar­ket ter­ri­tory.

That means their stock prices are down more than 20 per­cent from their re­cent highs, ac­cord­ing to Bloomberg data through Fri­day morn­ing.

In dol­lar terms, in­vestors suf­fered a pa­per loss of $2.5 tril­lion on U.S. stocks from the mar­ket’s record high Sept. 20 through Thurs­day, ac­cord­ing to Wil­shire As­so­ci­ates.

“It has been a re­ally rough start to the fourth quar­ter,” said Thomas Lee, man­ag­ing part­ner at Fund­strat Global Ad­vi­sors, a New York-based in­vest­ment firm.

A con­flu­ence of fac­tors is spook­ing in­vestors: fears of ris­ing in­ter­est rates, trade ten­sions with China, and a feel­ing that the strong earn­ings and healthy econ­omy can only get worse, not bet­ter.

“We just dropped 1,400 Dow points in two days, (but) the av­er­age stock is much, much worse,” said Gary Kalt­baum, pres­i­dent of Kalt­baum Cap­i­tal Man­age­ment. “It tells you how much real weak­ness there has been.”

Among S&P 500 com­pa­nies, shares of Newell Brands, the maker of Sharpie mark­ers, Cole­man cool­ers and Rawl­ings base­ball gloves, have fallen the most from their most re­cent high: 59 per­cent.

One slice of the mar­ket weighed down by higher in­ter­est rates is home­build­ing com­pa­nies. Shares of Len­nar and Pulte Group are down 40 per­cent and 34 per­cent, re­spec­tively, from their re­cent highs. Their home-buy­ing clients will pay more now that mort­gages carry higher in­ter­est rates.

An­a­lysts fear that au­tomak­ers like Ford Mo­tor, whose stock is down nearly 35 per­cent from its re­cent high, and Gen­eral Mo­tors, down more than 30 per­cent, will also suf­fer from weaker sales be­cause of higher fi­nanc­ing costs for new and used cars.

Both com­pa­nies’ busi­nesses have also been dinged by the ris­ing cost of com­modi­ties, largely due to Pres­i­dent Don­ald Trump’s 25 per­cent tar­iff on im­ported steel, which is also hurt­ing home ap­pli­ance maker Whirlpool and mo­tor­cy­cle icon Har­ley-David­son.

Pop­u­lar tech stocks have also suf­fered steep de­clines. In­vestors are bail­ing out of these once-high-fly­ing stocks in an ef­fort to take prof­its and flee to parts of the mar­ket that they be­lieve will hold up bet­ter in a down­turn.

Shares of Twit­ter are down more than 43 per­cent from their re­cent high, Face­book nearly 30 per­cent and video stream­ing ser­vice Net­flix 24 per­cent.

JUSTIN LANE/EPA-EFE

It was a rough week for stocks over­all, but some took an es­pe­cially painful plunge.

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