Key index recoups plunge since Jan. 1

Bloomberg

Banks, retailers and commodity companies accounted for the gain, which followed a drop in the index’s price to 10.1 times its companies’ annual earnings in March, the lowest level since 1985.

More than $2.3 trillion was restored to the value of American shares after the S&P 500 fell as much as 57 percent from its record 1,565.15 on Oct. 9, 2007.

The benchmark index for U.S. stocks erased a 25 percent decline in eight weeks, rebounding from a 12-year low, after companies from Wells Fargo to Ford Motor beat analysts’ projections and reports showed the worst losses in the housing market may be over. Monday’s 3.4 percent rally pushed the S&P 500 to 907.24, the highest level since Jan. 8.

Analysts optimistic on a sustained rise
"Once you get the stabilization put in, you could see a pretty meaningful upsurge in equity valuations," said Brian Barish, president of Cambiar Investors. "It’s entirely plausible to see it getting to about 1,000, maybe sometime in summer or fall."

Technology companies staged 2009’s biggest rally in the S&P 500, adding more than 19 percent for the best start to a year since 1998, according to data compiled by Bloomberg.

Mining and chemical companies increased almost 19 percent and a group of retailers and automakers gained 11 percent.

The other seven industries in the S&P 500, which include 316 companies, remain lower, with utilities down 7.8 percent, the most of any group.

Computer and software makers in the S&P 500 traded for 10.2 times annual profit in November, the lowest since at least 1994, according to data compiled by Bloomberg.

A group of metals and chemicals producers fell to 7 times annual profit in the final quarter of 2008, the cheapest in at least 15 years.

Eight S&P 500 stocks more than doubled this year, including insurer XL Capital, Sprint Nextel, the third-largest U.S. mobile phone company. Sun Microsystems surged 139 percent after Oracle, the world’s second-biggest software supplier, said it was buying the computer maker.

Huntington Bancshares, the third-largest Ohio bank, located in Columbus, has dropped 62 percent in 2009, the biggest retreat among 80 banks, brokerages and insurance companies in the S&P 500. The S&P 500 Financials Index remains down 6.7 percent this year. Though it recouped its 2009 loss, the S&P 500 is still 42 percent below its record.