The S&P 500 is approaching a record almost 5 1/2 years after peaking and two years after most stocks in the gauge fully recovered from the worst bear market since the 1930s.
The index has climbed 130% since March 2009, adding $10 trillion to the value of American equity as it erased losses from the credit crisis. The majority of companies surpassed their previous highs by April 2011, according to data compiled by Bloomberg. The S&P 500 Equal Weighted Index, which counts each company in the index equally instead of by their market value, increased 192% from the bottom.
Unlike past bull markets, where a single industry dominated, all groups have improved in this rally as the U.S. economy recovers. The breadth of the rebound can be seen in the S&P 500’s weightings, where none of the 10 industry measures represents more than 18% of the index. In 2000, technology companies made up 35% of the gauge, and in 2006, financial stocks accounted for 22%.
“The breadth of this rally is rather remarkable,” Stephen Wood, who helps manage about $152 billion as the New York-based chief market strategist for North America at Russell Investments, said by telephone. “It speaks to the fact that four years ago the markets were pricing in the end of the world, but the end of the world was not nigh. So we’ve seen this significant but drawn-out recovery across the board in equities -- small, medium, large, defensive, dynamic, value, growth.”
Oracle tumbled 7.6% to $33.05 today. The largest database-software supplier reported sales and profit that missed analysts’ estimates as corporate customers transitioning to Web- based programs bought less hardware and software.
Fiscal third-quarter profit excluding some items was 65 cents a share on adjusted sales of $8.97 billion, the company said in a statement late yesterday. That compared with analysts’ average projection for profit of 66 cents and revenue of $9.37 billion, according to data compiled by Bloomberg.
Hewlett-Packard slid 1% to $22.70. The world’s largest personal computer maker boosted its quarterly dividend by 10% to 14.52 cents, topping the average analyst estimate of 14 cents.
The payout increase comes a day after Chairman Ray Lane and two other board members were re-elected in slim majorities in a referendum that demonstrates growing dismay over the company’s performance and acquisition of Autonomy Corp.
Guess slid 6% to $25.33. The maker of designer jeans forecast annual revenue of $2.6 billion to $2.64 billion, less than analysts’ estimates of $2.74 billion.
Yahoo, the largest U.S. web portal, rose 1.7% to $22.47. The shares were upgraded to outperform, meaning investors should buy the shares, from market perform at Oppenheimer, which cited the value of Yahoo Japan shares and a possible initial public offering of Alibaba.com Ltd. in the next 12 months.