5 S&P 500 Stocks On The Forefront Of Q1 Slump

Although Wall Street had the best start to 2018 in more than three decades, things turned bitter to end the first quarter, with many sectors and stocks entering correction territory from their latest peak. With a day’s trading left, the S&P 500 is down 2.6% and on track for the worst quarter in two and a half years.

A combination of factors like concerns over faster-than-expected rates hike, trade tensions, and the health of the technology sector pushed the Wall Street from deep green to red.

Rate Hike Fears

The first round of brutal trading came in early February following the better-than-expected wage growth, sending major indices into correction territory. At the lower levels, the S&P 500 shed about $2.5 trillion in its value from Jan 26. Then, the Fed minutes and the new Fed chairperson Jerome Powell took away some sheen from the riskier assets.

Trump Tariff

Again in early March, Trump’s tariff news spooked markets, sparking threats of a trade war. President Trump imposed severe tariffs of 24% on steel imports and 10% on aluminum imports that could lead to retaliation from other countries thereby resulting in unforeseen consequences. Although this fear faded with Trump and other countries starting negotiations, the President’s intention to impose tariffs on up to $60 billion of Chinese imports, targeting the technology and telecommunications sectors, led to bloodbath in the stock markets yet again.

Tech Rout

Then the panic was created by the social media giant Facebook (NASDAQ:FB) following the data breach report, which sparked concerns about data privacy and security, resulting in increased scrutiny and possible regulatory pressure. The news has taken a toll not only the broader technology sector but the broad U.S. market as well. This was followed by a slew of negative news that again has sent the sector into a tailspin this week, with FANG stocks being the biggest losers.

In particular, the most recent tech rout has washed away about $2.34 trillion from the market cap of the S&P 500 since its peak in late January. This means that almost one-third of the Trump rally was erased during the current market pullback.

The stock market had added $6.9 trillion in market cap at the peak since Trump was elected. The FAAMG stocks — Facebook, Apple (NASDAQ:AAPL) , Amazon.com (NASDAQ:AMZN) , Microsoft (NASDAQ:MSFT) , and Alphabet (NASDAQ:GOOGL) — were the largest contributors. Though these stocks do not shed larger in terms of percentage, the pullback in Facebook and Alphabet took out a combined $230 billion of market cap from the S&P 500 in the last two months. Both stocks were down 13.3% and 4.6%, respectively.

That said, a number of stocks have crushed, piling up heavy losses during this time frame. Below, we have highlighted five such stocks from the S&P 500 index that have been hit badly in the market turmoil and might continue their rough trading in the months ahead if similar trends persist.

Patterson Companies Inc. (NASDAQ:PDCO) – Down 38.3%

The company distributes and sells dental and animal health products in the United States, the United Kingdom and Canada. The stock saw negative earnings estimate revision of 37 cents for the year (ending April 2018) during the quarter and is expected to generate earnings decline of 27.78%. PDCO has a Zacks Rank #5 (Strong Sell) and a VGM Score of C. It belongs to the bottom-ranked Zacks industry (bottom 14%).



L Brands, Inc. (NYSE:LB) – Down 37.4%

This company operates as a retailer of women's intimate and other apparel, beauty and personal care products and accessories primarily in the United States. It saw negative earnings estimate revision of 12 cents for this year (ending January 2019) during the quarter and is expected to witness earnings decline of 0.94%. The stock has a Zacks Rank #4 (Sell) and a VGM Score of C. It belongs to the bottom-ranked Zacks industry (bottom 17%).



Signet Jewelers Ltd. (NYSE:SIG) – Down 32.4%

This company is engaged in retailing of jewelry, watches and associated services. It has seen massive negative earnings estimate revision of $2.69 for the year (ending January 2019) during the quarter. SIG is expected to register earnings decline of 37.79%, and has a Zacks Rank #5 and a VGM Score of C. It belongs to a bottom-ranked Zacks industry (bottom 20%).



Albemarle Corporation (NYSE:ALB) – Down 30%

This is a global specialty chemicals company with leading positions in lithium, bromine, refining catalysts and applied surface treatments. Though the company saw negative revision of three cents for this year during the quarter, it is expected to post earnings growth of 11.55%. The stock carries a Zacks Rank #3 (Hold) and a VGM Score of A. It belongs to a top-ranked Zacks industry (top 30%).



Newfield Exploration Company (NYSE:NFX)

This company explores, develops and acquires oil and natural gas properties primarily in the Gulf of Mexico. It has seen solid earnings estimate revision of 32 cents for this year during the quarter and has an expected growth rate of 38.60%. Newfield Exploration has a Zacks Rank #3 and a VGM Score of B. It further falls into a top-ranked Zacks industry (top 43%).



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