In this series, we take a look at the 25 stocks on the S&P 500 Index (SPX) that have turned in the worst performance during the past decade – what went wrong, and what happens next.

The sad tale of KeyCorp (NYSE: KEY) is one of slow, steady progress up the charts -- followed by steep, stomach-churning declines. The stock topped out at $44.88 in April 1998, and then spent the next two years free-falling down the charts. This March 2000 bottom was followed by a slow and steady march higher that didn't reach its peak until February 2007, when the shares again began to cascade lower.

What went wrong? At number 24 on our list of S&P 500 laggards, KEY shed 69% of its value between June 30, 1998 and June 30, 2008, when the shares settled at $10.98. While the equity started slipping in February 2007, KEY didn't take its first massive hit until the following October. In its third-quarter earnings report, the financial-services firm announced a profit of 54 cents per share -- woefully short of analysts' consensus forecast, which called for 71 cents per share.

At the time of the earnings miss, the subprime-infected finance sector was already sweating under the glare of Wall Street's spotlight, and KEY's slip-up resulted in a single-day drop of almost 6%. Chairman and CEO Henry Meyer III assured investors that the worst was over for banking stocks ... but, on May 30, KEY plunged again after hiking its forecast for net loan charge-offs. A few weeks afterward, on June 12, KEY sheepishly confessed plans to slash its dividend by half in an attempt to shore up capital. Traders unleashed their wrath with particular enthusiasm; during the course of that single session, the stock shed nearly 24%.

What next? KeyCorp shuffled back into the earnings spotlight on July 22, and its continuing-operations loss of $2.70 per share was narrower than the average Street estimate of $2.99. Part of the quarterly loss stemmed from an adverse tax ruling, which KEY intends to appeal. Meanwhile, the rest of the loss can be chalked up to a loan-loss provision of $647 million -- which is 12 times greater than its provision in the year-ago period.

On the plus side, KEY is in a position where even bad news looks kinda good. The stock gained more than 4% on the day of its earnings report, and S&P Equity Research saw fit to upgrade the shares from "strong sell" to "sell."

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the weekly video series Option Basics on SchaeffersResearch.com.