Thought it was safe to scoop up some beat-down S&P 500 stocks? The market just showed you again the risks of bargain-hunting.
Eight stocks in the S&P 500 that already plunged 30% or more in the year's first crash, including technology firms like IPG Photonics, health care Moderna and consumer discretionary firms like General Motors, are falling anew, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. They're all off 10% or more from the top of the S&P 500's attempt to recover this year on March 29.
Seeing continued weakness in some S&P 500 stocks is noteworthy as the S&P 500 itself tries to hang on. The S&P 500 is only down 2.3% from the March 29 high of its last attempted recovery.
"The markets are very indicative of the uncertainty that we continue to see from Ukraine and Russia negotiations to sanctions, interest rates, recession warnings, lockdowns," said Craig Erlam, senior market analyst at Oanda. "There's no end to the uncertainty, which makes the resilience we're seeing in stock markets all the more impressive."
But that can't be said of some hard hit S&P 500 stocks.
S&P 500 Technology Stumbles Again
Investors thought they were getting a second shot at owning S&P 500 technology stocks. But it's been a head fake in many places.
Yes, the Technology Select Sector SPDR ETF dropped more than 19% from the S&P 500's high on Jan. 3 through the low on March 14. But just when you thought it was time to jump in, it's down 3.3% from the March 29 recent high.
Some individual S&P 500 tech stocks' ups and downs are even more dramatic. Computer chipmaking supply company IPG Photonics is already down 12% from the S&P 500's recovery high on March 29. Keep in mind the stock dropped by nearly 40% from the S&P 500's Jan. 3 high this year to the low. It's a similar story at another technology titan: the well-run Teradyne. Shares dropped more than 10% from the S&P 500's recovery high in March after losing more than a third of its value in the first sell-off this year.
Not Just Tech Cracking
Financials have rolled over, too. The Financial Select Sector SPDR ETF is down more than 4% from the attempted recovery high in March. That's more of a drop than in any of the other 10 S&P 500 sectors.
But there are widespread pullbacks showing up in several sectors. Health care giant Moderna is now down more than 10% from the March high. And that's coming off a vicious 36.2% drop from the S&P 500's high this year to the low. And perennial favorite with dip buyers, consumer discretionary General Motors, is now off more than 10% from the March high. It too lost a third of its value this year from the high to the low.
Seeing the S&P 500 falling again isn't what many dip buyers wanted. But it's just another sign to follow time-tested rules when jumping into stocks in a volatile market.
Fool Me Twice: S&P 500 Stocks Faltering Again
S&P 500 stocks down 10% or more from the March high, following a 30% or higher drop from the high to low this year
| Company | Symbol | First crash (Jan. 3 to March 14) | Second decline (March 29 to now) | Sector |
|---|---|---|---|---|
| IPG Photonics | -38.8% | -12.1 | Information Technology | |
| Aptiv | -37.1 | -10.6 | Consumer Discretionary | |
| Teradyne | -36.4 | -10.7 | Information Technology | |
| Moderna | -36.2 | -10.3 | Health Care | |
| Lam Research | -35.4 | -11.5 | Information Technology | |
| General Motors | -33.3 | -10.5 | Consumer Discretionary | |
| PVH | -32.9 | -16.8 | Consumer Discretionary | |
| Advanced Micro Devices | -31.9 | -13.3 | Information Technology | |
| S&P 500 | -13.0 | -2.3 |
