10 Worst-Performing S&P 500 Stocks of 2011

(To update to note that Bank of America shares are down today on news that the Federal Reserve may force big banks to raise capital base.)

BOSTON ( TheStreet) -- Burned-out investors have thrown in the towel as the stock market staggers toward the finish line in danger of failing to reach breakeven.

International crises, especially the eurozone's debt quagmire, have held sway on U.S. investors' outlook all year, contributing to record volatility.

And despite some encouraging economic signs America recently, including near-record third-quarter earnings, 288 of the S&P 500 Index companies are in the loss column. The index is down 1.4%.

Nowhere is the dismal market performance more apparent than on the list of the 10 worst stocks of 2011, which have lost anywhere from 53% to 74%.

Working against some of these companies has been the fear factor, as investors are seeking safe, high-quality, dividend-paying stocks, and turning their backs on anything that's speculative.

There's no real common denominator to this sad lot, as it includes stocks from many different sectors, ranging from steel and coal companies to solar-panel makers to two clunkers from the beleaguered financial sector.

Some of these companies will survive, others may be bought out by competitors, but only one or two are worth consideration from bottom-feeding investors.

"It looks like some investors are just selling out and waiting for the New Year to see how the land lies," said Cameron Brandt, global research director at mutual-fund tracker EPFR.

In order of least-worst to worst, here are the 10 poorest-performing stocks in the S&P 500 Index this year:

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10. Genworth Financial ( GNW)

Performance: down 53%

Profile: The company sells domestic and international mortgage, long-term care, and life insurance as well as annuities.

The Scoop: Deteriorating credit markets and rising mortgage defaults hit the company hard, and it still is threatened by those issues, particularly in Europe, so keep your powder dry on this one as there are too many potential negatives.


9. AK Steel ( AKS)

Performance: down 54%

Profile: The company operates seven steel mills in the U.S., producing flat-rolled carbon, electrical and stainless steel for use in the automotive, construction, appliance and machinery industries.

The Scoop: The company said it expects higher operating costs and lower spot market selling prices in the fourth quarter. But the CEO added he was optimistic beyond that, in anticipation of a gradual U.S. economic rebound and a sustained spike in auto-industry demand. That's not much assurance, though, given that the company also sells internationally.

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8. Hudson City Bancorp ( HCBK)

Performance: down 54%

Profile: The firm operates in wealthy communities in the New York tri-state area with a focus on making jumbo residential loans.

The Scoop: Hudson City took a $1.2 billion restructuring charge in early 2011 as a result of the fluctuating interest rate environment that contributed to a wave of refinancings by borrowers into lower-yielding products, which squeezed income. Nothing has changed to turn this stock around.


9. U.S. Steel ( X)

Performance: down 56%

Profile: The company is the second-largest steel maker in the U.S. and among the top 20 globally.

The Scoop: U.S. Steel has been hurt by the soft global economy that's weakening demand for steel. Its executives recently said they expect to see more of the same. The only bright spot is sales of its tubular steel for the oil and gas industry, but that's not enough to turn the tide.

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6. Netflix ( NFLX)

Performance: down 60%

Profile: Netflix provides subscription-based Internet services for TV shows and movies in the U.S. and internationally. Its DVD-rental business was successful.

The Scoop: In order to meet rapidly rising competitive challenges, Netflix has begun offering a streaming video service that delivers digital content to PCs, Internet-connected TVs and consumer electronic devices. The company also boosted prices for its popular DVD-by-mail and streaming service by 60% in a recession and, not surprisingly, lost 9 million DVD customers since June.

Netflix recently said it expects a full-year net loss in 2012, worse than its earlier prediction of the same. It's losing focus and has a damaged brand image. Given those challenges, stay away from this one.


5. Bank of America ( BAC)

Performance: down 61%

Profile: The bank is one of the largest financial institutions in the world, with lending operations in the consumer, small business, and corporate arenas in addition to asset-management and investment-banking divisions.

The Scoop: The company's average annual share-price loss over the past decade is 5.4%, which should tell you all you need to know. But for background, its acquisition of troubled Countrywide Mortgage in 2008 is causing big write-offs and continued bad publicity.

There are also potential legal liabilities of tens of billions of dollars from investor lawsuits because of that deal. Due diligence before an acquisition, anyone? Bank of America also faces the economic challenges that other U.S. banks do, including weak new loan growth and a low, flat yield curve.

Bank of America's shares are down 4% Monday to lead the blue-chip Dow's decliners after The Wall Street Journal reported that the Federal Reserve is considering adopting rules by regulators in Basel, Switzerland, requiring major financial institutions to hold extra capital.

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4. MEMC Electronic Materials ( WFR)

Performance: down 66%

Profile: MEMC Electronic is a maker of silicon used in computer chips and solar panels.

The Scoop: Another stinker over the long term, MEMC has an average annual loss of 12% over 15 years and it doesn't look like there's a turnaround ahead. The company's primary product, silicon used in computer chips, is being commoditized and its prices undercut. One of its biggest customers, Suntech Power Holdings, canceled its supply agreement in July, a deal that was supposed to last through 2016.


3. Alpha Natural Resources ( ANR)

Performance: down 66.8%

Profile: The company is one of the nation's largest coal operators and is a major producer of thermal coal used in electric power plants and metallurgical coal used in the steel-making process.

The Scoop: The economic slowdown is hurting demand, particularly from steel makers at home and in China. Its ill-timed acquisition of Massey Energy earlier this year -- after that company's tragic mine accident in 2010 -- is taking longer than expected to integrate and costing much more than planned.

On the positive side, Alpha is benefiting from near-record metallurgical coal prices, as the Australian floods of the past two years has severely disrupted production there. And the economy, and coal demand, has got to turn around some time, so it's worth consideration.

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2. Monster Worldwide ( MWW)

Performance: down 67%

Profile: The company is the leading Internet job search Web site operator and has a huge database of job candidates.

The Scoop: The company has been hurt by the long-running weak job market and increased competition from social networking and niche industry-focused Internet employment sites such as LinkedIn, Facebook and Craigslist, which have lower overhead. Its operating margins are shrinking as is its profitability, and even with a job rebound, upside is limited since the business landscape has been redefined.


1. First Solar ( FSLR)

Performance: down 74%

Profile: The company makes solar modules and turnkey solar systems worldwide. It's the largest solar firm in the U.S.

The Scoop: The industry relies heavily on government subsidies, particularly in Europe, so demand is beholden to their whims. The shares took a hit this year when CEO Robert Gillette was fired.

Competition is increasing as solar products become commoditized, cutting profit margins. China is ramping up its solar industry and stealing market share. Last week the company lowered earnings and revenue estimates for the year and said it will lay off about 100 people. Nothing to see here people -- move along.

On a much-needed positive note, MidAmerican Energy Holdings, owned by Berkshire Hathaway (BRK.B), said Friday it will up its stake in a $1.8 billion solar-power plant being built by First Solar (FSLR), and owned by NRG Energy (NRG), to 49%, giving some optimism to companies in the beleaugered solar sector.

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>>To see these stocks in action, visit the 10 Worst-Performing S&P 500 Stocks of 2011 portfolio on Stockpickr.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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