Why American Airlines Group Inc (AAL), Novo Nordisk A/S (ADR) (NVO) and Synchrony Financial (SYF) Are 3 of Today’s Worst Stocks

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Despite a better-than-expected retail sales report for May, stocks started Tuesday’s trading in the red, and struggled to shrug off that weakness all session long. By the time the closing bell rang, the S&P 500 was at 2075.32, down 0.18%.

Why American Airlines Group Inc (AAL), Novo Nordisk A/S (ADR) (NVO) and Synchrony Financial (SYF) Are Three of Today's Worst StocksIt could have been worse though — you could have owned a stake in American Airlines Group Inc (NASDAQ:AAL), Novo Nordisk A/S (ADR) (NYSE:NVO) or Synchrony Financial (NYSE:SYF). These three names were couldn’t win for losing today, although for understandable reasons.

American Airlines Group Inc (AAL)

For the second day in a row, American Airlines Group was deep in the red, and in good company. Peers and rivals United Continental Holdings Inc (NYSE:UAL) and Southwest Airlines Co (NYSE:LUV) also lost a ton of their value today. It was AAL leading the way though, in terms of total pain dished out.

The prod was the same as Monday’s. That is, this weekend’s mass shooting at a gay club in Orlando by a man claiming an affiliation with a terrorist group has spooked some would-be travelers out of travel plans.

AAL closed nearly 5% lower today.

Novo Nordisk A/S (ADR) (NVO)

The good news is that Novo Nordisk diabetes drug Victoza does indeed cut risks to diabetic patients’ hearts, as hoped. The bad news is that it doesn’t do so well enough.

NVO shares lost nearly 5% of their value on Tuesday following the release of an update on a key trial of diabetes drug Victoza. All told, 22% of the drug’s users were less likely to die of heart disease. Mathematically, the benefit of the drug was 13% better than alternatives. Problem: The drug’s study needed to indicate a 15% improvement on currently achievable results to be considered a success.

While on some fronts the difference between the target efficacy and the actual efficacy would be negligible, it was critical that Victoza perform well, as a rival drug from Eli Lilly and Co (NYSE:LLY) demonstrated 14% more effectiveness than the NVO drug in terms of heart safety.

Synchrony Financial (SYF)

Last but not least, Synchrony Financial, spun off from General Electric Company (NYSE:GE) in mid-2014, is still struggling on its own. SYF shares plunged 13% today when the credit card lender warned investors it expected its charge-off rate to grow rather than shrink next year. Specifically, the company believes its bad-loan write-offs will rise between 20 and 30 basis points.

Chief Financial Officer Brian Doubles commented on the outlook:

“There doesn’t appear to be anything that pertains to how we’re underwriting — it appears to be a general softening in the consumers’ ability to pay. We’re coming off historic lows; we wouldn’t view this as a step change in consumer behavior necessarily.”

Investors weren’t sympathetic, however, and the market presumed Synchrony’s headwind wasn’t unique to Synchrony. Capital One Financial Corp. (NYSE:COF) shares lost nearly 7% of their value, while American Express Company (NYSE:AXP) ended the day down over 4%.

The 13% selloff was the stock’s biggest-ever single-day loss.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/why-american-airlines-group-inc-aal-novo-nordisk-as-adr-nvo-and-synchrony-financial-syf-are-three-of-todays-worst-stocks/.

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