Damage assessments from the recent market slump are rolling in, and stock losses are more gruesome and bigger than they appear on the surface.
The downfall of many individual stocks has been far more sizable than the broad stock market’s discomforting but manageable 7 percent drop from its late September high, data show.
Big time troubles for the struggling bull market lurk in the deeper pool of companies that make up the Standard & Poor’s 500 stock index. Shares of many of them are in full retreat, with 165 companies, or one-third of the index, now in bear market territory.
That means their stock prices are down more than 20 percent from their recent highs, according to Bloomberg data through Friday morning.
In dollar terms, investors suffered a paper loss of $2.5 trillion on U.S. stocks from the market’s record high on September 20 through Thursday, according to Wilshire Associates.
“It has been a really rough start to the fourth quarter,” says Thomas Lee, managing partner at Fundstrat Global Advisors, a New York-based investment firm.
A confluence of factors is spooking investors: fears of rising interest rates; trade tensions with China; and a feeling that the strong earnings and healthy economy can only get worse, not better.
“We just dropped 1,400 Dow points in two days, (but) the average stock is much, much worse,” says Gary Kaltbaum, president of Kaltbaum Capital Management. “It tells you how much real weakness there has been.”
Among S&P 500 companies, shares of Newell Brands, the maker of Sharpie markers, Coleman coolers and Rawlings baseball gloves, have fallen the most from their most recent high: 59 percent.
More: What is the stock market doing today? Dow opens sharply higher
More: Stock market sell-off could signal turning point for bull market, as Dow plunges again
More: Why did the stock market drop? Here are all the reasons for the Dow plunge
Many of the other big losers are stocks that are sensitive to rising interest rates or fallout from tariffs. Still others are former high-flyers that were prime candidates for investors to cash out of when the market plunged.
Here’s a glance at the fallen:
Stocks hurt by spiking borrowing costs
One slice of the market weighed down by higher interest rates is home-building companies. The shares of Lennar and Pulte Group are down 40 percent and 34 percent, respectively, from their recent highs. Their home-buying clients will pay more now that mortgages carry higher interest rates. The rate on the 30-year fixed-rate home loan — the most popular mortgage for purchases — recently ticked above 5 percent for the first time since early 2011. That makes it more challenging for people already facing higher prices and low inventory to afford a home.
Analysts fear that automakers like Ford Motor, whose stock is down nearly 35 percent from its recent high, and General Motors, which is down more than 30 percent, will also suffer from weaker sales due to higher financing costs for new and used cars.
Both companies’ businesses have also been dinged by the rising cost of commodities, largely due to President Trump’s 25 percent tariff on imported steel. Back in July, GM reported $300 million in increased commodity costs in the second quarter. Similarly, Ford said tariffs resulted in $145 million in higher costs and could rise to as much as $600 million for the full year.
Shares upended by tariffs
It’s not just automakers being hurt by tariffs. Home appliance maker Whirlpool, whose shares are down 44 percent from their recent high, downgraded its full-year profit outlook in July. The gloomier forecast was based in part on an increase of $200 million in raw material costs because of the 25 percent import tariffs on steel and 10 percent tariffs on aluminum.
Shares of Harley-Davidson are down more than 27 percent. Back in June, the iconic motorcycle maker said it would incur added costs of $45 million to $55 million this year due to trade disputes.
Market darlings abandoned by followers
Popular tech stocks have also suffered steep declines. Investors are bailing out of these once-high-flying stocks in an effort to take profits and flee to parts of the market that they believe will hold up better in a downturn.
Shares of Twitter are down more than 43 percent from their recent high, Facebook is down nearly 30 percent, and video streaming service Netflix is 24 percent lower. The stock prices of Twitter and Facebook, whose top executives were recently grilled by federal lawmakers about user privacy issues and foreign manipulation of U.S. elections, have also come under pressure over fears of coming government regulation.
“It’s not surprising to see a rotation out of high-flying names and into less-aggressive stocks,” says Amanda Agati, co-chief investment strategist at PNC Financial Services Group.