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Why these 4 ASX shares dropped lower today

In afternoon trade the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has built on yesterday’s gain and is higher by over 0.2% to 5,782 points.

Four shares which have acted as a drag on the market today are listed below. Here’s why they have dropped lower:

The Aveo Group (ASX: AOG) share price has tumbled 2% to $2.30 despite there being no news out of the retirement community manager. This morning Ord Minnett maintained its accumulate rating on Aveo’s shares, but cut its price target to $3.60. This still implies sizeable upside for its shares over the next 12 months.

The Fisher & Paykel Healthcare Corp Ltd (ASX: FPH) share price has fallen almost 3.5% to $11.53 after Credit Suisse downgraded the medical device company to an underperform rating. Although the broker has been impressed with the progress that Fisher & Paykel Healthcare has made over the last few years, it thinks that its shares are overvalued now. I would class it as hold at this level.

The Fortescue Metals Group Limited (ASX: FMG) share price is down over 2% to $4.85 after the iron ore price fell sharply. According to Metal Bulletin, the spot price for benchmark 62% fines fell 2.2% to US$59.65 a tonne. This brings its two-day decline to almost 5%. The low grade 58% fines that Fortescue produces tumbled 2.7% to US$35.98 a tonne.

The Whitehaven Coal Ltd (ASX: WHC) share price has fallen almost 3% to $3.77 after its quarterly update wasn’t as strong as some had expected. However, management does believe that demand in China will strengthen as a number of key seaborne end users are changing their quality requirements due to a greater focus on environmental and generation efficiency.

Avoid declines like those above by avoiding these toxic shares that look set to drop lower.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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