Here Are the 9 Worst-Performing Dow Stocks in 2016

The Dow Jones Industrial Average is essentially flat for the year, but these big stocks have severely underperformed.

Author:: Laurie Kulikowski
Publish date:: May 21, 2016 12:20 PM EDT

Editors' pick: Originally published May 20.

The Dow Jones Industrial Average moved lower on Thursday, briefly putting the bellwether index into negative territory for the year as stocks digested the likelihood that the Federal Reserve could raise interest rates come June.

For the year, the Dow is now up just 0.06%, while the S&P 500 has slumped into the red, down 0.19% for 2016.

While there have been several unlikely winners of the Dow this year, there is also a group of bellwether stocks that have had it rough for the first five months, sinking far into negative territory.

These nine Dow stocks are down more than 5% year to date.

Shares of General Electric have been hit by rocky markets as global growth worries and lower oil and gas prices put pressure on the storied company, despite its transformation initiatives. The stock is down 5.75% this year (yet shares are nearly 18% higher from April 2015, when it announced it was selling GE Capital assets).CEO Jeffrey Immelt is seeking to streamline GE and position it for the digital industrial age. GE is in the process of shedding its GE Capital lending business. It is also in the process of integrating the $10 billion acquisition of France-based Alstom.The company reported a quarterly profit of 21 cents a share, excluding parts of the lending business up for sale, compared with the 19-cent average of estimates in a Bloomberg survey. GE's growth in businesses such as medical equipment, jet engines and wind turbines made up for a large drop in its oil and gas unit."Our performance during the quarter demonstrates the strength of the GE operating model," Immelt said on a conference call with analysts. "Diversity is a key strength during this period of volatility. We are in the midst of a challenging oil and gas market, however, we are seeing sustained strength in aviation and power markets, and health care is rebounding."TheStreet's Jim Cramer holds GE stock in his Action Alerts PLUS charitable trust. He wrote recently:"Amid a slow-growth environment, the company has made strong progress on its key transformation initiatives and is ahead of plan for the sale of its capital assets along with the integration of Alstom Energy. We continue to view the now-3.1% dividend yield as highly attractive (especially vs. the 1.75% yield on 10-year Treasuries) and believe the company has paved the way for a clearer, simpler and more stable business model that should command a higher multiple as investors increasingly value the company as a multi-industrial powerhouse rather than a financial (it has shed nearly all of its legacy GE Capital assets)."Beyond its quick and successful exit from financial services, we think investors underappreciate several aspects to the story, including the potential of GE Digital's data analytics business, the company's steadily diminishing reliance/correlation to global GDP growth, and emergence as a world-class, multi-industrial Internet of Things titan. We reiterate our $35 target."

Shares of Walt Disney are down 6.35% in 2016.Not even the box office success of The Jungle Book and superhero film Captain America: Civil War have been able to push Disney into the green this year. The company's theme parks have underperformed while its cable TV unit that includes the sports powerhouse ESPN posted a decline in advertising and fees from pay-TV operators to carry the network, crucial revenue streams for Disney. ESPN is also experiencing a drop in subscribers due to cord cutters opting for Netflix and Amazon's Prime Video.Despite Disney's disappointing quarterly earnings, management is running this company for the long term, says TheStreet's Jim Cramer."There's so much in the pipe at Disney that you just can't grade it on revenue lost by a broadcast network that can get hot or from subs at ESPN that will, in the end, continue to generate fortunes for years to come," Cramer said on Monday. "I care about Shanghai Disney, which is about to open, but I care about Mickey Mouse. I care about Captain America,' which I believe will have a huge weekend again, but I care about 'Snow White.' I care about 'Frozen' 2, 3 and 4 and 'Star Wars' 8, 9 and 10, but also I care about 'Pirates of the Caribbean' and the Jungle Cruise and so many other rides at Disney World and Disneyland that my children's kids will love as much as they did."

Shares of Nike have been under pressure. The stock is down 8.74% this year.While the Beaverton, Ore.-based sports apparel and sneaker retailer put up solid fiscal-third quarter results, revenue did fall short of analysts' expectations. It was the second consecutive quarter that Nike missed revenue estimates, with the dollar partly to blame.Nike has also been suffering at the behest of its competitor Under Armour , which is hurting investor perception. Under Armour's endorsement of NBA star Stephen Curry is helping it win market share of basketball sneaker sales, which is dominated by Nike, according to TheStreet's Brian Sozzi.

Microsoft's stock tumbled following the software company's less-than-stellar quarterly results last month, which signaled to investors that its cloud business -- the very thing that CEO Satya Nadella has been banking on to help the aging tech company's turnaround -- may not be growing fast enough. Microsoft said that revenue from its cloud business rose a modest 3% to $6.1 billion. Shares sank more than 7%, while its market cap was slashed by $30 billion following the results. The stock is currently down 9.3% for 2016.The company recently said it was exiting the entry-level mobile phone business it acquired from Nokia in 2014. Microsoft is selling the business for $350 million to Hong Kong-based FIH Mobile, according to Investor's Business Daily.

Shares of American Express are down 9.79% in 2016.The credit card company has seen its stock hit hard from the loss of its partnership with Costco after 16 years of being the exclusive card accepted there. The bulk retailer has replaced American Express with Visa . It will also use Visa and Citigroup for its co-branded credit card.American Express said the loss of the partnership would cut into profit for at least two years. Earlier this year, Fidelity also severed ties with American Express, opting instead for U.S. Bancorp and Visa.Still American Express reported better-than-expected top and bottom line results for its most recent quarter.Jim Cramer's Action Alerts PLUS portfolio owns shares of Costco, Citigroup and Visa.

Shares of Apple are down 10.51% in 2016.Apple has had a rough year, despite a recent boost of confidence by Berkshire Hathaway . Apple reported its first revenue decline in nearly 13 years for the March-ending quarter, due to weak iPhone sales. The Cupertino, Calif.-based company also said that third-quarter sales would tumble further, issuing revenue guidance between $41 billion and $43 billion for the June quarter, below what analysts were expecting.Following the tech giant's earnings report, activist investor Carl Icahn announced he had sold all of his position in Apple. However, earlier this week, news broke that Warren Buffett's Berkshire Hathaway purchased $1 billion in Apple stock in the first quarter.Meanwhile Bernstein analyst Toni Sacconaghi gave hope to investors when it placed a $1 trillion target on Apple's market capitalization based on the idea that it monetizes its services instead of relying on hardware sales. It's a theory that Jim Cramer, manager of the Action Alerts PLUS portfolio, which owns Apple shares, agrees with, but says Apple is a "schizophrenic stock" right now."[This] is something that I've been calling for and that would be helped by India and China," Cramer said. "Although that's really a domestic thing to some degree."Still, Apple shareholders will ultimately be fighting the Federal Reserve at home should it choose to hike rates multiple times, he cautioned.

Shares of Boeing are down 11.42% in 2016.The commercial aircraft business is highly cyclical and Boeing is feeling the effects of slowing sales, especially on its 777 jetliner. Last week, as part of its investor day, the company laid out an "ambitious, five-year strategy," according to Reuters, to ramp up sales and profit as well as "boost efficiency, return free cash to shareholders and expand the after-market services and parts business."Last month, Bank of America/Merrill Lynch downgraded the stock to underperform from neutral over concerns that its new 787 Dreamliner was not profitable enough for the company."The bull thesis on the stock is predicated on strong free-cash-flow generation in the out years, largely driven by the 787 Dreamliner, in our view. Boeing's current outlook assumes that the 787 will generate $29 billion of cash by 1Q22, while our analysis shows that Boeing will only generate $14 billion of cash," wrote analysts Ronald Epstein and Kristine Liwag in a note to clients on April 20.

Shares of Intel have plunged 14% in 2016.Intel is laying off 12,000 workers, or 11% of its global workforce, by mid-2017 as the company pivots from a provider of chips for PCs to faster-growing cloud and data center businesses, as well as the "Internet of Things" and memory and programmable solutions, according to Business Insider.Intel expects the program to deliver $750 million in savings this year and have an annual run rate savings of $1.4 billion by mid-2017, it said in an April 20 release."Our results over the last year demonstrate a strategy that is working and a solid foundation for growth," CEO Brian Krzanich said in the release. "The opportunity now is to accelerate this momentum and build on our strengths.CLSA initiated with an underperform rating on Tuesday with a $30 price target."The problem with Intel is they're a company in transition now -- more than half of their revenue is in the PC market," CLSA senior analyst Chris Caso told CNBC. "It's no surprise to people -- certainly no surprise to management -- that that is in secular decline. But as they grow into other market segments ... we think they are going to have to compete on a more level playing field and it's just really hard to replicate the dominance they have in PC ... and the competitive advantage they have there."On a positive note, reports surfaced on Wednesday that Intel had a big iPhone win. Intel will supply 50% of the modem chips for the iPhone 7, according to Barron's citing Digitimes.

Shares of Goldman Sachs are down 14.17% in 2016.The market turmoil, low interest rates and stiffer regulation have taken a bite out of profits at Goldman and other investment firms this year.Goldman's revenue for the first quarter plunged 40% compared with the prior year's quarter, while net earnings dropped 56% year over year. Revenue fell in Goldman's investment banking, advisory, underwriting and institutional client services businesses, among others."The operating environment this quarter presented a broad range of challenges, resulting in headwinds across virtually every one of our businesses," Chairman and CEO Lloyd Blankfein said in the earnings release.Goldman Sachsplans to cut as many as 109 jobs this year, a Bloomberg article from March said.

General Electric

Shares of General Electric
have been hit by rocky markets as global growth worries and lower oil and gas prices put pressure on the storied company, despite its transformation initiatives. The stock is down 5.75% this year (yet shares are nearly 18% higher from April 2015, when it announced it was selling GE Capital assets).

CEO Jeffrey Immelt is seeking to streamline GE and position it for the digital industrial age. GE is in the process of shedding its GE Capital lending business. It is also in the process of integrating the $10 billion acquisition of France-based Alstom.

The company reported a quarterly profit of 21 cents a share, excluding parts of the lending business up for sale, compared with the 19-cent average of estimates in a Bloomberg survey. GE's growth in businesses such as medical equipment, jet engines and wind turbines made up for a large drop in its oil and gas unit.

"Our performance during the quarter demonstrates the strength of the GE operating model," Immelt said on a conference call with analysts. "Diversity is a key strength during this period of volatility. We are in the midst of a challenging oil and gas market, however, we are seeing sustained strength in aviation and power markets, and health care is rebounding."

TheStreet's Jim Cramer holds GE stock in his Action Alerts PLUS charitable trust. He wrote recently:

"Amid a slow-growth environment, the company has made strong progress on its key transformation initiatives and is ahead of plan for the sale of its capital assets along with the integration of Alstom Energy. We continue to view the now-3.1% dividend yield as highly attractive (especially vs. the 1.75% yield on 10-year Treasuries) and believe the company has paved the way for a clearer, simpler and more stable business model that should command a higher multiple as investors increasingly value the company as a multi-industrial powerhouse rather than a financial (it has shed nearly all of its legacy GE Capital assets).
"Beyond its quick and successful exit from financial services, we think investors underappreciate several aspects to the story, including the potential of GE Digital's data analytics business, the company's steadily diminishing reliance/correlation to global GDP growth, and emergence as a world-class, multi-industrial Internet of Things titan. We reiterate our $35 target."