by Haley Whitewood

Created on: January 13, 2009   Last Updated: January 22, 2009

Stocks to avoid in 2009

The year 2008 has brought about some of the most frightening drops in the stock market seen in recent times. Now in 2009 with a battered stock market many are lured by low stock prices. However there is still plenty of money to be lost if one invests in the wrong stock.

Banking and Credit Institutions

Banking and credit institutions suffered heavily in 2008 and many collapsed. The future is bleak, even for the survivors. Citigroup (C) sought money from the government twice in 2008 and will struggle to stay afloat without more government intervention. Morgan Stanley (MS) saw its stock drop 70% in 2008 and American Express' (AXP) bank holding status may make it a year of defaults and downsizing. The rising number of credit card defaults is expected to weaken Capitol One (COF) significantly.

"Old" Media

In this internet age, the printed word is suffering from both declining readership and decreased real estate ads. Publishing conglomerates such as The New York Times (NYT) are hemorrhaging millions in loses and are in danger of declaring bankruptcy. Other media companies, such as Sirius XM Radio (SIRI), have large amounts of debt due in 2009 and little means of paying it off.

Airline/Air Parts Industries

The last year's financial crisis brought rising costs and a decrease in ticket purchases. Delta Airlines (DAL) and United Airlines (UAUA) were particularly sensitive to high oil prices in the summer of 2008 and with oil expected to reach similar values in 2009, stock value may suffer.

The air parts industry suffered as well. Boeing (BA) had impressive gains the past few years, but last year's stock market fiasco caused Boeing stock to lose half of its value. Unfortunately, favorable conditions have not been forecasted in 2009.

United Technologies (UTX) is expected to suffer both from reduced air parts orders and the Obama administration. While military spending was plentiful during the past several years under President Bush, President Obama is expected to cut defense spending and use some of the money to treat the sick economy, leaving United Technologies with fewer government orders as well.

Manufacturing Industry

A strong dollar isn't always good for business, as manufacturing companies know. A major manufacturer, 3M (MMM) lost a quarter of its stock value in the last months of 2008 and values are expected to drop this year as well. DuPont (DD) is very dependent on the price of oil and compensated in 2008 by increasing oil prices, weakening its competitiveness. Profit margins are expected to continue declining in 2009. Eastman Chemical (EMN) lost half of its stock value in 2008 and its underfunded pension fund may drain already shrinking profits. It's

Eastman Kodak created Kodak film and Kodak cameras, and its products were once a staple in many households in America. The advent of the digital camera drove Eastman Kodak in a similar direction to save itself, but the past two years have shown little change in stock value.

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