Market’s downturn sharper in these areas
Lots of stocks already deep into bear terrain
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.
It was a rough week for stocks overall, but some took an especially painful plunge.