BOSTON ( TheStreet) -- Investor confidence in the equities market was eroded in the second quarter as Americans shifted out of stocks and in to the relative safety of fixed-income investments.
That resulted in a 5.5% tumble for the S&P 500 in the period, on the heels of a 12% first-quarter gain.
It's not just the conundrum that is the European sovereign debt crisis that worries investors, it's also the struggling domestic economy, the outcome of health-care reform and the nation's ultimate direction, given that it's a presidential election year.
And the outlook for stock investors isn't likely to be clarified any time soon. "Investors continue to confront the paradox of a three-year-old subpar U.S. economic recovery that is generating record levels of quarterly corporate earnings, but is producing extremely low levels of investor confidence," say S&P Capital IQ analysts. "As a result of the low growth, the U.S. economy is more vulnerable than normal to external negative influences." The energy sector is the biggest loser in the second quarter, down almost 12%. Financials are down about 8%, with the industrials, materials and information technology industries not far behind, all with declines of just over 7% in the period. Two energy industry companies turned in some of the worst performances in the second quarter, although they're at different ends of the spectrum when it comes to power generation. The biggest loser in the S&P 500 in the quarter is coal miner Alpha Natural Resources (ANR), down 46%. Investors bailed out of its shares, knowing that there is a huge supply of coal on hand at utility power stations after a mild winter. Longer term, it is clear that natural gas, which is at record low prices now, is increasingly going to be replacing coal as an energy source for utilities.
Shares of solar power module maker First Solar (FSLR - Get Report) declined 37%, as concerns rose over its viability and the profitability of its business line due to increased competition from China and decreasing government subsidies for solar energy products. High-end retailers have also been hurt by Europe's economic weakness as they've seen a decline in demand due in part to high unemployment and the slipping value of the euro. Losers include quirky fashion accessories seller Fossil (FOSL - Get Report), down 41%, the second-worst performance in the S&P 500 in the quarter, and upscale clothier and retailer Abercrombie & Fitch (ANF - Get Report), down 38%. Here are the 10 worst-performing stocks in the S&P 500 in the second quarter, ranked from least to worst share-price decline: