The bulls may have got the week started out on the right foot, but the tide quickly turned Monday afternoon and pulled the market back into the red. By the time the closing bell rang, the S&P 500 had given up 0.46% of its value to close at 2,092.43.
And some stocks did much, much worse. Take SINA Corp. (NASDAQ:SINA), Kinross Gold Corporation (NYSE:KGC) and BHP Billiton Limited (NYSE:BHP) as an example. These three names were fighting — and losing — an uphill battle from the time the opening bell rang. Here’s the deal.
SINA Corp. (SINA)
It wasn’t the only Chinese internet stock to dip deep into the red ink today, but SINA Corp. was the one leading the charge lower, giving up nearly 6% of its value.
The prod for the pullback from SINA actually materialized over this past weekend. As The Wall Street Journal reported on Saturday, Chinese regulators are displeased with the way SINA censored — or more specifically, failed to censor — some of the comments posted at its microblogging site Weibo.com.
The Cyberspace Administration of China said in its official statement that Weibo “distorted news facts, violated morality and engaged in media hype”
The news couldn’t have come at a worse time for SINA shareholders, who had just seen shares act as if they were finally going to snap out of a year-long bearish rut.
BHP Billiton (BHP)
BHP Billiton shareholders were on the wrong end of not one but two key developments for the company today that sent BHP shares more than 4% lower.
The first and admittedly less meaningful stumbling block was an announcement made last Friday that BHP Billiton Limited — along Rio Tinto plc (NYSE:RIO) — were being probed by the Australian tax authority. The authorities believe the two outfits may have improperly sidestepped tax rules for multinational companies.
The more detrimental news working against BHP Billiton Limited was Citigroup’s iron ore outlook. The bank’s investment research arm says it believes iron ore prices could fall another 20% or more before hitting bottom. Citigroup poured salt in the wound by downgrading BHP from a “buy” to a “hold.”
Kinross Gold (KGC)
Kinross Gold didn’t commit any investing cardinal sin to deserve today’s 5% pullback. It’s simply in the wrong place at the wrong time.– a gold miner at a time when gold is abnormally unpopular. All told, gold futures fell 0.4% on Monday, reaching a price of $1200 per ounce.
Truth be told, it’s not a real reason to cause alarm for KGC owners. The commodity has been bobbing around the $1200 level for three weeks now; it hasn’t suddenly jump-started a new downtrend. Owners of Kinross Gold and other miners have become very sensitive to even the slightest of headwinds though, reacting sharply to any red flag.
Should the price of gold break under $1190 per ounce, however, that could start an even bigger selling avalanche for gold stocks.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
