Local stocks follow trend up

Local stocks follow trend up

April 1st, 2011 by Mike Pare in Business Around the Region

Share prices of most Chattanooga area companies followed the broader markets upward in the first quarter.

Asphalt equipment maker Astec Industries and carpet manufacturer Dixie Group led local stocks in the period with the biggest percentage gains, figures show. Cornerstone Bancshares was the biggest loser.

While major market indexes were higher in the quarter, Z. Cartter Patten, a principal in the Chattanooga investment firm of Patten & Patten, said upsides were largely in the energy and industrial segments in the S&P.

"The volumes were low and there wasn't a whole lot to pick to go up," he said.

Still, Jim Campbell, who heads the Chattanooga firm Campbell Asset Management, said it was "a good start" to the year especially in the face of an array of "bad news." He said that oil prices are up and the Japan tragedy is affecting some American companies.

Oil prices have jumped $20 since the Libyan uprising began in February. Higher oil prices can pinch spending by forcing consumers to pay more for gasoline and could cut into economic growth.

At the same time, employment is picking up as the economy produces more jobs, Campbell said.

The Dow Jones industrial average closed its best start to the year since 1999 on Thursday.

Looking ahead into the second quarter, Patten said a lot of challenges remain. He cited rising commodity prices, inflation in other nations and the possibility of a U.S. government shutdown.

But Patten said he thinks corporate first-quarter earnings will meet expectations.

"The risk is in the guidance they give," he said.

Campbell said his view for the rest of the year is "not too hot and not too cold - a kind of a grind higher."

He said the economic trend is in "the right direction," though the improvement is slow.

Campbell said he sees a potential government shutdown as a long-term positive. The discussion is not whether to cut the federal government's budget, but by how much, he said.

The Associated Press contributed to this story.