2018 wasn’t a good year for the Dow Jones Industrial Average (DJINDICES:^DJI). The index lost nearly 6%, marking its worst losses since the financial crisis in 2008.
Yet some stocks saw much poorer performance than the overall Dow did, and that contributed toward pulling the entire average lower. Below, we’ll take a look at Goldman Sachs (NYSE:GS), IBM (NYSE:IBM), and DowDuPont (NYSE:DWDP) to see why they were the worst stocks in the Dow in 2018.
Goldman gets tarnished
Goldman Sachs finished the year down 34%, the worst performer in the Dow. A number of things conspired to hit the investment bank hard.
Turmoil in the financial markets often leads to volatility for Goldman. In the past, the investment bank has usually found ways to profit from turbulent markets, but it typically takes time for the company’s prowess to show up in its financial results.
In addition, fears of a recession spell potential trouble for Goldman’s banking business. Despite higher short-term interest rates, longer-term rates have fallen, creating a partially inverted yield curve that often precedes recessions. The resulting narrower interest rate spreads also make it more difficult for banks to boost earnings.
Finally, Goldman had a key business deal go bad during the year. The Malaysian government is looking to get back hundreds of millions of dollars in fees related to a bond investment fund.
Put together, these factors are all weighing on investor sentiment for Goldman. The investment bank has a tradition of bouncing back from adversity, though, so some see 2019 as a potentially strong year for the stock despite some of the macroeconomic threats to the industry.
IBM gets the Big Blues
IBM was the second-worst performer in the Dow, posting a loss of 26% for the year. After