After setting an all-time closing high on Monday, the S&P 500 Index has lost ground in the last two trading sessions, as corporate earnings fail to make a compelling bullish case and Wall Street moves timidly with monetary policy still largely up in the air. That said, the two-day pullback in the stock market has by no means been severe; the S&P fell just 6 points, or 0.4%, Wednesday to close at 1,685. The same cannot be said for the following three S&P components: Their losses today were quite severe indeed.
We all know that when an analyst turns bearish on a stock, things can get ugly, at least immediately after the news hits the wires. Fewer people can recall how a stock reacts when seven analysts lower their expectations in the same day, which is exactly what happened with Broadcom Corporation (NASDAQ:BRCM) today. As you can imagine, buyers didn’t exactly start piling in, and shares cratered 15.1%. The chipmaker’s results yesterday, universally loathed on Wall Street, as revenue in Broadcom Corporation (NASDAQ:BRCM)’s mobile and wireless business — a fairly important area of focus — actually fell from the year before.
Communications hardware company Motorola Solutions Inc (NYSE:MSI) took a 6.6% haircut after reporting a disappointing quarter of its own. The Achilles’ heel of Motorola Solutions Inc (NYSE:MSI) is its dependence on revenue from the government for growth. Such confidence in the federal government — a government that is expected to begin a biennial debate over whether it should pay its own bills next month — may not be the best business model. Especially with disapproval ratings of Congress sitting at 83%, the highest level The Wall Street Journal has ever recorded. On the enterprise side of its business, Motorola Solutions Inc (NYSE:MSI) has also been slow to release new products. Double whammy.
Lastly, shares of Newmont Mining Corp (NYSE:NEM) were down 4.9% ahead of tomorrow’s earnings report. The gold and copper miner isn’t expected to post a blowout quarter, considering the fact that gold prices plummeted early in the period. Newmont Mining Corp (NYSE:NEM) is extremely sensitive to fluctuations in the precious metal, and has already reduced its outlook for the quarter and the next two fiscal years between 40% and 45%. Having already cut jobs to reduce costs, some investors fear that the 5% annual dividend may be the next on the chopping block.
The article Today’s 3 Worst Stocks originally appeared on Fool.com and is written by John Divine.
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 has no position in any of the stocks mentioned.
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