Between disappointing personal spending in February and consumer sentiment that didn’t advance as expected for March, traders couldn’t find anything bullish to latch onto to end the trading week. By the time the closing bell rang, the S&P 500 was at 2,362.72, down 0.23%, solidifying the slowdown we’ve seen unfurling since Wednesday.
It could have been worse though — you could have owned Sears Holdings Corp (NASDAQ:SHLD), Cara Therapeutics Inc (NASDAQ:CARA) or Exxon Mobil Corporation (NYSE:XOM). These three stocks were the worst of the worst, albeit for understandable reasons.
Here’s what investors need to know about each meltdown.
Exxon Mobil Corporation (XOM)
The 2.0% pullback oil giant Exxon Mobil dished out to XOM shareholders today wasn’t devastating, but in terms of the amount of damage done as measured by total market cap lost, the company deserves a spot on the daily “worst 3” list.
The company didn’t do anything wrong. XOM owners were just moving to a defensive posture in response to this afternoon’s release of the Baker Hughes rig count numbers. The number of working oil rigs in the U.S. rose for an 11th straight week, to 662. The ongoing advance in that number implies an oversupply of oil is brewing, which ultimately works against oil prices.
Cara Therapeutics Inc (CARA)
Biopharma name Cara Therapeutics is planning on a secondary offering, and current CARA shareholders aren’t thrilled about it.
The company, which is developing therapies to treat pain and itching using its kappa opioid receptor agonist (KORA) platform, announced after Thursday’s close it would be issuing 4.45 million new shares of CARA at a price of $18 each. The entire offering, including the over-allotment option, is worth $92.1 million.
There are 27.3 million shares of CARA outstanding right now — 22.6 million of which are in the float — currently priced at $17.90 after today’s 2.0% setback.
Sears Holdings Corp (SHLD)
Last but not least, shares of struggling retailer Sears Holdings fell 2.2% on Friday, bringing an end to a surprising and oddly strong 38% gain SHLD had mustered over the course of the first four days of the week.
The sudden interest in Sears was mostly prompted by reports that CEO and hedge fund manager (as well as major Sears shareholder) Eddie Lampert bought an additional 525,936 shares of SHLD a week ago today. With an insider proverbially eating more of his own cooking, it was easy for traders to conclude he knew something they didn’t.
That new optimism was dialed back today, however, when it was reported that the value of its credit default swaps — a bet that Sears won’t be able to pay obligations on its debts — have more than doubled in price over the past couple of weeks. The increase in price says more professional traders and institutions are expecting Sears to go into default.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.