Rising Tide Became More Selective In November

Although many stocks moved higher in November as the stock market rally continued, not all investors were able to share in that glory. The biggest large-capitalization losers in the S&P 500 were spread across many different sectors and included some energy, retail and insurance names.

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Biggest Big-Cap Losers
CVS Caremark (NYSE: CVS) was the big large-cap loser in 2009, down 11% for the month with most of the loss coming in the first week. The company told investors that its pharmacy benefits business lost contracts worth $3.7 billion in 2010, and that it was the subject of an investigation by the Federal Trade Commission. During its third-quarter earnings conference call, Thomas M. Ryan, the CEO, said, "It now looks like operating profit in the PBM will decline in 2010, perhaps as much as 10% to 12%."

Kohl's (NYSE: KSS) dropped 7% in November. This was a little surprising considering the company reported decent earnings in November for its third fiscal quarter and raised guidance for the current quarter and full year. Standard & Poor's even raised its ratings outlook on the company's bonds from negative to stable, but this was not enough to make the company move higher. It would seem that expectations were set a little too high for this retailer, and perhaps investors sold slowly during the month, not wanting to risk holding the stock in case of a poor showing on Black Friday. (For more on this sector, be sure to check out Analyzing Retail Stocks.)

Murphy Oil (NYSE: MUR) committed the unpardonable sin of missing its earnings estimates and also guided the Q4 down. The reasons were an expected loss in its refining and marketing segment, and lower production in its exploration and production business. The shortfall in production was due mostly to issues at its Sarawak natural gas project in Malaysia, which was having infrastructure problems. Murphy Oil finished down 7% for the month. (For related reading, see Oil And Gas Industry Primer.)

Yahoo! (Nasdaq: YHOO) was also a poor performer in November, down 6%. From a technical perspective, Yahoo's stock price is running into a strong resistance level and has formed a multiple top at around $18 per share, and anytime the stock hits that level it sells off. The stock did so in late October and continued to slide in November as well.

Marsh & McLennan Companies (NYSE: MMC) seems like it should have had a great month. The company reported earnings in early November and beat its quarterly earnings estimates by 85%. The company also settled two outstanding lawsuits for $435 million, dating back to an investigation by Elliot Spitzer, who was the attorney general of New York at the time. Despite this, the stock ended the month down 5%.

Losers Spread Across Many Different Sectors
Investors did not get to celebrate equally in November, as many large-cap stocks were left behind and punished by the market. This pattern will probably continue in 2010 as the rising tide may be more selective in choosing which stocks to move up.

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