S&P 500's trouble mostly rooted in just 10 issues

[Italkcash Newsfeed]

Ten companies -- led by ConocoPhillips, Time Warner and Merrill Lynch -- are behind the bulk of the carnage that helped fuel the worst ever two-month start for the S&P 500, which on Monday made another run through its November lows.

While the companies that make up the S&P 500 tallied a collective $114 billion in losses in the still-being-reported fourth quarter, the scenario would be remarkably different -- and profitable -- if 10 companies behind $131 billion in losses were removed from the picture, says S&P's senior index analyst Howard Silverblatt.

"The fact that the ten worst losses accounted for $131 billion, therefore leaving the remaining 490 issues with positive earnings is relevant, but saying the index is positive is akin to saying that the S&P 500 is up 12% from its October 9, 2007 highs, if you only had purchased the six issues that are up since then," said Silverblatt.

Those half a dozen companies range from education services provider Apollo Group Inc. , specialty retailer AutoZone Inc. , to natural gas firm Southwestern Energy Co. , which on Thursday reported fourth-quarter earnings climbed 45.5%,.

Biotechnology company Gilead Sciences Inc. and discount retailer Family Dollar Stores Inc. were also profitable in the fourth quarter, with the latter in January raising its quarterly dividend.
Also, Wal-Mart Stores Inc., the globe's biggest retailer, which last month reported better-than-expected earnings for the fourth quarter.
Of 479 reported issues, or 98% of the index's market value, 134 reported negative earnings, and that tally excludes the more-than $61 billion loss reported Monday morning by insurer American International Group Inc. Read more on AIG.
Word of AIG's loss, along with the government hiking its stake in the battered insurance giant, helped push stocks down Monday. Trading below 7,000 for the first time since Oct. 28, 1997, the Dow Jones Industrial Average was down 233.77 points in early afternoon trading at 6,829.16. The S&P 500 fell 27.14 points to 707.95, while the Nasdaq Composite shed 39.86 points to 1,337.98

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