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10 Worst Stocks So Far in 2012

The worst Dow Jones and S&P 500 stocks at the midway point

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#1 Worst S&P Stock: Alpha Natural Resources

Alpha Natural Resources ANRSector: Energy

If you want to find the sector hardest hit in 2012, look no further than the coal industry. Alpha Natural Resources (NYSE:ANR) is one of the top suppliers of metallurgical coal for steel-making and thermal coal to electric utilities, and is the poster child for trouble among its peers.

For starters, the soft economy has created soft demand for steel. That means less metallurgical coal is needed — especially since base metal prices are painfully low, and steel producers need to be cautious about ramping up production too fast and thus glutting the market and driving prices even lower. Secondly, a soft economy means weaker energy demand even in markets like China that typically devour coal. Thirdly, where there is energy demand, an excess of cheap natural gas is more attractive to utilities because of its cleaner nature (sorry “clean coal” PR workers).

The result has been an obliteration of coal stocks. ANR is down 60%, but it’s hardly alone. Arch Coal (NYSE:ACI) is off by about the same amount this year, and the much smaller Patriot Coal (NYSE:PCX) is off by even more.

Jeff Reeves is the editor of, and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at or follow him on Twitter via @JeffReevesIP. As of this writing, Jeff Reeves did not own a position in any of the stocks named here.

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