After suffering through 2008 and the first quarter of this year, stock bulls finally have something to crow about. In the second quarter, the S&P 500 rose 15%, turning in its best performance since the glory days of the second quarter of 1998. Are these gains sustainable?
Gainers and laggers
As the following tables demonstrate, some large-capitalization stocks turned in huge numbers, while others were left behind in the rally.
S&P 500 Gainers (among top 5%)
Company
Q2 2009 % Return
Cyclically-Adjusted P/E Ratio*
Ford Motor (NYSE: F)
130.8%
--
Bank of America (NYSE: BAC)
93.5%
4.6
Dow Chemical (NYSE: DOW)
91.5%
6.2
Capital One Financial (NYSE: COF)
78.8%
5.8
Source: Capital IQ, a division of Standard & Poor's, author's calculations.
*Price divided by average earnings-per-share over the prior ten years. Note that this P/E differs from the one cited for the S&P 500 below; the latter uses inflation-adjusted earnings.
S&P 500 Laggers (among bottom 5%)
Company
Q2 2009 % Return
Cyclically-Adjusted P/E Ratio
Bristol-Myers Squibb (NYSE: BMY) Continued... |