Halfway through the year, The Examiner Top 10 is begging for a rewrite.
Only six months into 2008, the portfolio?s value has sunk a staggering 18 percent, as financials like Provident Bankshares and Legg Mason and discretionary stock Under Armour have all taken huge hits.
The collection of stocks has even dipped lower than the Dow Jones Industrial Average, a traditional stock market bellwether, which is down more than 15 percent since the beginning of the year.
Provident?s stock price has slipped more than 70 percent, while Legg Mason?s stock price is down more than 46 percent since Jan. 2.
“Financials have continued to be a drag on the market, with the sector down 24 percent year to date as of June 20,” said Bill Stone, chief investment strategist for PNC. “Even though the overall market has risen since [the Bear Stearns crisis on] March 17, the financials sector is down more than 5 percent since then.”
Under Armour started the year strong, opening with a price of $43.69 at the beginning of the year, but its price has since dropped more than 40 percent as consumers pull back on their discretionary spending as gas and food costs hit record highs.
Under Armour on Tuesday said David McCreight would replace company creator Kevin Plank as company president. Plank will remain chief executive officer and chairman and said he would “focus on driving growth and steering the Under Armour brand, both in theUnited States and around the globe.”
The rough news for investors is it might get worse before it gets better, with news of oil prices reaching $150 a barrel and the U.S. economy losing jobs in the tens of thousands every month.
“Along with weakness in housing and nonresidential construction, credit shortages and tepid automobile sales are causing businesses to trim investments in new capacity and hiring plans,” said Peter Morici, professor at the University of Maryland School of Business. “The crisis is clearly worsening.”
Stone expects the market to remain volatile as it continues to deal with weak economic news, housing and financial sector woes and excessively high commodity prices. For investors who are looking for a better second half of 2008, he suggests sticking with well-known growth companies.
“As economic growth and earnings slow, we believe investors may prefer high-quality and well-capitalized companies that can continue to deliver earnings growth,” Stone said.
