Reversing course again for the second day in a row, the S&P 500 rekindled last Friday’s selling effort … in spades. When all was said and done, the index lost 1.48%, ending the session at 2127.02. That was just a few points above a key support level at 2121, where the index hit a low on Monday.
It was even worse for owners of Wells Fargo & Co (NYSE:WFC), Potash Corporation of Saskatchewan (USA) (NYSE:POT) and Freeport-McMoRan Inc (NYSE:FCX) today, however.
Here’s why these three names led the bearish charge.
Freeport-McMoRan Inc (FCX)
Not that it wouldn’t have been in the gutter anyway, but gold and copper mining outfit Freeport-McMoRan shareholders were given a double dose of bad news on Tuesday, making FCX the worst of the worst of the large-caps.
Part of the pullback was driven simply by the market’s broad selloff, which dragged most commodities down with it. Crude oil, for instance, was off by 2.3%, and the market’s meltdown prompted worries that demand for industrial metals would also wane.
Perhaps the bigger piece of the 8.4% tumble FCX took today was news that it had finally sold its Gulf of Mexico oil property to Anadarko Petroleum Corporation (NYSE:APC). Activist investors pressed for the sale, but understandably so. Energy wasn’t particularly in the mineral miner’s wheelhouse, and it was proving to be a costly distraction. Still, Freeport-McMoRan took a big loss on the sale.
Potash Corporation of Saskatchewan (USA) (POT)
It wasn’t just the mineral mining names that got caught up the basic materials rout on Tuesday. Agricultural chemicals also got hit hard, as did their stocks.
Agrium Inc. (USA) (NYSE:AGU) and Potash Corporation of Saskatchewan weren’t immune to the plunge in fertilizer prices, though these two ended up being the worst of the worst today for a very specific reason — yesterday the two announced they would become one.
It was a well-received idea, particularly in the face of dwindling fertilizer prices. Nevertheless, both stocks have struggled over the course of the last few days on falling ag-chemical prices. Fanning the bullish flames on Tuesday, however, were reports that Moody’s was mulling a downgrade of the combined company’s credit rating.
Technically AGU fell more, with its 4.3% loss, but in terms of total market cap lost and selling volume, the 3.6% dip POT logged actually did the most damage.
Wells Fargo & Co (WFC)
Last but not least, the fallout from all the unauthorized accounts Wells Fargo employees opened over the past few years — in order to meet their sales goals — isn’t over yet. After mulling it over for a few days following a stiff $185 million fine, the bank has elected to not impose any sales goals for its bankers at all, moving to the other extreme end of the spectrum.
The about-face is commendable, and sends a strong message to employees as well as consumers. But, the 3.2% pullback WFC made today suggests shareholders think the bank’s new plan could ultimately hurt the revenue growth they had become accustomed to seeing.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
