Several much-awaited statements from the Federal Reserve sent the stock market higher today, as investors cheered the central bank's projections -- projections that don't call for meaningful increases in short-term interest rates until 2015 or 2016. Although all 10 sectors of the market advanced today, shares of ConAgra Foods, (CAG 0.40%), Coach, (TPR 0.03%), and Express Scripts (ESRX) finished as the three worst stocks in the S&P 500 Index (^GSPC -0.22%) today. The S&P, for its part, added 14 points, or 0.8%, to end at a record high, 1,956.
Packaged foods giant ConAgra Foods plunged 7.3% on Wednesday, finishing as the biggest laggard in the entire 500-stock index. The sudden decline came as the company warned investors that its earnings in the fiscal fourth quarter would come in far below prior estimates. The results of the fiscal fourth quarter, by the way, will be reported next Thursday, so ConAgra's warning didn't give investors much time to react before the undoubtedly disappointing news next week.
Source: Coach website.
Lastly, shares of pharmacy benefits manager Express Scripts shed 2.2% on Wednesday. The stock was hit on news that its own CEO, George Paz, disposed of more than a quarter of his shares on Friday. While this revelation sounds drastic at first, last Friday's move is simply a result of the reimbursement structure in corporate America. Stock options are often used as incentives to lure highly sought-after executives, and George Paz's sale of Express Scripts stock last week was routine in that sense. His options allowed him to buy hundreds of thousands of shares at $26.68, only to immediately turn around and sell those shares for $71.21apiece, turning a profit of more than $30 million. While the practice is in some sense "routine," it still robs the company of $30 million it could've had if it just sold the shares on the open market.Shares of luxury retailer Coach also suffered today, losing 4% in trading. Coach actually managed to lose ground before managing investor sentiment, as Barclay's analysts lowered their price target from $48 to $45 per share. Coach will undoubtedly try to impress the public tomorrow at its investor day on Thursday, but it may take something rather shocking to reverse public opinion. Coach has been steadily losing market share to competitors -- most notably Michael Kors -- in recent years. Coach's decline could amplify if its strategy of embracing outlets and cutting prices at its retail locations ends up diluting the brand.
