The Stock Market Has Been Really Tough on These 10 Industries
There are very few stocks that performed well in August. It was pretty ugly all around, as the market endured a correction that wiped out any gains produced this year up to that point.
Some industries got hurt worse than others, however. Anything related to technology was slammed hard, and the low price of oil hurt companies in the fuel industry. While past returns aren't indicative of future performance, it can be helpful to understand why certain stocks tanked recently.
Here are the 10 worst-performing industries in August of this year.
1. Road and Rail
The S&P 500 Road and Rail Index dropped more than 11%, and it could have been worse were it not for a late-month rally. Stocks like CSX and and Norfolk Southern have had a tough year, as shipments of goods remain sluggish.
2. Household Products
Companies that manufacture the products we use every day are often some of the most stable investments, but August was not kind to them. It was a tough month for shares of the usually solid Procter and Gamble (down 7.8%) and Kimberly Clark (down 7.3%.) The S&P Composite 1500 Household Products Index fell 7% in August.
3. Paper and Forest Products
As people increasingly use email and the web for communications, paper is becoming less popular. And August was an especially bad month, with the S&P 500 Paper & Forest Products Industry Index down 9.8% during the month. Hardest hit stocks included International Paper (down nearly 10%), and Clearwater Paper Corp. (down 4.7%).
4. Chemicals
It hasn't been a great stretch for companies like Dow Chemical and BASF. The Dow Jones U.S. Chemicals Index reported a 6.5% drop during the month. BASF, the largest company in this space, saw shares fall 7.5% in August, while Dow's declined 7%.
5. Health Care Services
Health Care companies were some of the top performers in recent years, so they may have been due to come back to earth a bit. The S&P Healthcare Services Industry Index fell 5.7% in August, and September has looked even worse, with an additional 10% drop as of this writing.
6. Semiconductors and Equipment
The S&P Total Market Semiconductor Index fell more than 3.5% in August, making worse what had already been a down year for semiconductor stocks. Tech stocks haven't been particularly attractive to investors this year, so semiconductor stocks including Micron Technology and Rambus have been hammered down.
7. Software
Another industry hurt by the performance of the technology sector. Big names including Oracle (down 7%) and Microsoft (down 6.8%) had a tough time in August. The S&P Software and Services Index fell 5.5% during the month.
8. Electrical Components and Equipment
Like semiconductors and software, stocks in this space were hurt by the overall drop in tech stocks in August. The Dow Jones U.S. Electrical Components and Equipment Index reported a 5.4% drop during the month, and it's down 13% for the entire year.
9. Oil and Gas
With oil prices down, down, down, any company involved in the exploration of fuels has taken a beating, and August was especially bad. The S&P 500 Oil, Gas, and Consumable Fuels Index declined more than 5% in August, and was down as much as 15% at one point before rallying.
10. Building and Construction
August was a bad month for companies involved in building stuff. The S&P Building and Construction Industry Index dropped 3.6%, as companies including Lend Lease and Chicago Bridge & Iron Company saw double-digit drops in share growth. The bad month of August was only a precursor to an even uglier September.
Has your portfolio bounced back since August's correction?
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