The S&P 500 is poised to close out the year with a slight gain, but the blue chips in the Dow Jones Industrial Average are still in the red for 2015, if only slightly. If the Dow does finish the year with a loss, it’ll be the first year-over-year drop since the financial crisis in 2008.
While stocks like Nike (NKE), McDonald’s (MDC), Home Depot (HD) and Microsoft (MSFT) have all performed well in 2015, racking up gains between 22 percent and 32 percent, many of the other names in the index have been hurt by falling energy prices, a strong dollar and concerns about consumer spending. Here’s a look at the worst laggards in the Dow — the eight stocks that have lost more than 10 percent this year — and why they fared so poorly.
8. Procter & Gamble (PG) -11.8 percent
Since the majority of the company’s revenue comes from overseas, the strength of the dollar has cut into earnings. In order to offset the currency headwinds, P&G has raised prices on many of its products, causing customers to turn to cheaper competitors. A focus on core brands has helped cut costs, and the company spends about $2 billion a year on research and development, but it may need to bring some exciting new products to market to really foster growth.
7. IBM (IBM) -12.5 percent
Can IBM reinvent itself? Investing billions in areas like cloud computing, analytics, mobility and security software may pay off down the line, but investors are waiting to see real signs of success. For now, Big Blue still has the blues.
6. Exxon Mobil (XOM) -15.2 percent
The country’s biggest oil company has been hit by tumbling oil prices and the slowdown in China. The decline in the share price might have been worse if not for the company’s cautious approach to long-term oil projects, its ownership of diverse oil refineries and its choice to buy back shares.
5. United Technologies (UTX) -15.7 percent
Multiple missteps, like miscalculating the demand for aerospace spare parts and problems at a new distribution center for engine parts, have hurt. In addition, the company got some bad press after the Government Accountability Office said that the engines that the company built for the F-35 Joint Strike Fighter program were unreliable and not meeting program goals.
4. Chevron (CVX) -19.5 percent
Low oil prices and China’s economic woes have hammered the stock, and a dividend yield of nearly 5 percent hasn’t been enough to prevent investors from selling. Earnings per share for the year will fall short of the $4.28 dividend and free cash flow has tumbled by some $7 billion, though the company still generates enough cash from operations to maintain that payout. Whether the stock rebounds in 2016 will depend on the direction of crude oil prices.
3. American Express (AXP) -24.3 percent
After Costco cut ties with American Express earlier in the year, JetBlue also broke up with the credit card company and Fidelity is reportedly considering doing the same. The severed deals have forced AmEx to spend money to attract new customers. Earnings have also been hurt by the strong dollar and investments needed to keep up with payment technolgy.
2. Caterpillar (-CAT) 24.5 percent
Shares of Caterpillar, the company that builds big machines for that mining and construction industries, have been getting slammed thanks to the slowdown in emerging markets. After riding the booms in emerging market construction, Caterpillar is suffering from a drop in demand for natural resources.
1. Wal-Mart (WMT) -28 percent
The retail giant faces increased competition from fast-growing e-commerce retailers like Amazon and is struggling to keep itself relevant in a time when more and more people are prioritizing convenience. Other reasons for the company’s poor performance include its decision to pay higher wages to workers and spend more money on employee training to improve a its customer service and make shopping in its stores a better experience. To that end, the company is also investing in revamping its outdated brick-and-mortar locations.