Yesterday investors chose to concentrate on positive domestic economic news rather than gloomy European financial crises, and the Dow Jones Industrial Average jumped 115 points on the day. Their ignorance will eventually come back to bite them, but exuberant traders enjoyed their moment in the sun.

The three stocks below, however, were in hot water for reasons of their own, but don't go running over the cliff with them like a bunch of lemmings just yet: this could just be a temporary situation. Let's first see whether they had good reason to fall as panic-fueled routs can sometimes lead to excellent buying opportunities.

Company

% Change

ZIOPHARM Oncology

(64.5%)

National Bank of Greece

(8.1%)

Star Scientific

(7.5%)

Running on empty
When you run out of gas, the only thing you can do is get out and push your car to the shoulder and wait for assistance. That's effectively the situation ZIOPHARM Oncology finds itself in as its soft tissue cancer treatment palifosfamide failed to achieve its goals in a late-stage trial. With nothing else available to it, the drugmaker is limping to push the therapy to the curb and have it tested for use on other cancers.


ZIOPHARM said the treatment failed to extend progression-free survival rates, and with "no way the drug will get approval anywhere in the world," according to the CEO, it will stop the drug's development on that particular tangent and will instead examine its efficacy as a possible treatment for small-cell lung cancer. In the process, it will convert an ongoing study into a mid-stage trial.

Investors really didn't much care to hear about what the next hurdle and wiped out two-thirds of its value. When analysts forecast a 50-50 chance of success, I cautioned against investing in ZIOPHARM, so at this point there's no reason to get in now, either.

We're all in this together
Most people still probably can't even find Cyprus on a map, let alone understand why it's about to bring down the eurozone. A good question to ask is: How did it manage to pass all those stability tests last year yet suddenly come to the edge of the precipice? Likely it was all done with a wink and a nod as finance ministers whistled past the graveyard, but their solution of seizing 40% of the wealth from Cypriot depositors to pay for its bailout puts other countries with equally stressed out finances at risk of a bank run. If it can be done in Cyprus, then Greece, Italy, and Portugal can easily have the "template" applied to them.

National Bank of Greece, with substantial exposure to Cyprus -- and Portugal, Ireland, Italy, Spain, and Hungary -- is reeling from the prospects of what will occur if the dominos start falling. Its own financial situation is still fragile, and other European banks like Banco Santander stand on the edge as Spain looks to wipe out shareholders at troubled Bankia and cause bondholders to take a 30% haircut to repair the ailing bank. 

There's no reason why investors need to jump into foreign financial institutions, either, as there's likely a lot more pain in their future.

This star is dimming
It couldn't have been that much of a surprise, could it, that Star Scientific would face shareholder lawsuits after revealing the U.S. Attorney's Office was investigating it?

Last week, the supplements maker said the investigations centered on private stock placements the company made since 2006 along with various related party transactions. That trial lawyers would jump into the fray is to be expected, but Star elevated the threat they pose by responding to their claims and announcing it would vigorously defend against the charges leveled.

Whether the back and forth between the lawyers and the company is really worth additional losses in the stock is doubtful, though the actual investigations themselves are worrisome and, like the other two companies looked at today, should serve as a caution against diving into Star Scientific any time soon.

Ready for a resurrection
Many investors are scared about investing in big banking stocks after the crash, but the sector has one notable stand out. In a sea of mismanaged and dangerous peers, it stands out as The Only Big Bank Built To Last. You can uncover the top pick that Warren Buffett loves in The Motley Fool's new report. It's free, so click here to access it now.

The article Why Did My Stock Just Die? originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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