The bulls may have mustered a major breakout effort on Tuesday, but they sure didn’t follow-through with it on Wednesday. With nothing new to encourage another round of buying, traders let the S&P 500 slip 0.72% to a close of 2063.36.
It was much worse for anyone who owned Banco Bradesco SA (ADR) (NYSE:BBD), United Continental Holdings Inc (NYSE:UAL) and Devon Energy Corp (NYSE:DVN), however. These three names led the bearish charge.
Here’s why.
Banco Bradesco SA (ADR) (BBD)
In its defense, Brazilian bank Banco Bradesco didn’t do anything wrong today — or even this week — to explicitly deserve today’s selloff. On the other hand, being in the wrong place at the wrong time is of little concern or comfort to the market and shareholders, respectively.
BBD was down more than 5% on Wednesday largely because an already-beleaguered Brazilian market was up-ended again … this time (presumably) by tax-loss harvesting before the calendar year ended.
Banco Bradesco had plenty of company in the gutter. Brazilian meat supplier BRF SA (NYSE:BRFS) saw its stock fall more than 5%, while Telefonica Brasil SA (NYSE:VIV) logged a loss of more than 4%.
Devon Energy Corp. (DVN)
Much like Banco Bradesco, Devon Energy as a company is blameless today. It’s simply the victim of unfortunate circumstances. Also like BBD, however, the unfair circumstances just don’t matter to investors.
The prod behind the 4% pullback from DVN shares is yet another tumble in crude oil prices. Oil slumped 3.1% today, to $36.70 per barrel, dragging down most of the energy sector’s key names. For instance, Kinder Morgan Inc. (NYSE:KMI) lost 3.7% of its value on Wednesday, and Noble Energy, Inc. (NYSE:NBL) lost 3.5%.
United Continental Holdings Inc (UAL)
Last but not least, just when it looked like United Continental Holdings shares might wiggle their way out of a rut and finally take flight again, the market comes along to cancel that flight …
… much like airline authorities decided to ground 1,600 flights to and from Chicago alone last night due to inclement weather. All told, nearly 3,000 U.S. flights have been canceled in the past two days.
That’s the superficial reason UAL shares fell 3% on Wednesday, but there’s another, more philosophical reason investors came to a bullish conclusion on United Continental Holdings. That reason is the bevy of stories posted in just the past few days explaining how travelers were greatly benefiting from the price war currently being waged by airlines. Every dollar saved by passengers is a dollar not counted as revenue by air carriers.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
