Miller top gainer of local stocks

Miller top gainer of local stocks

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

Stock prices for Chattanooga area companies were mixed in the second quarter with more firms' shares falling than rising.

Shares of First Security Group continued to sink as the parent of FSG Bank restructured operations following losses from loan write-offs totaling nearly $82 million over the past two years.

Conversely, tow truck maker Miller Industries charged ahead in the quarter, with its stock gaining 15 percent on top of a 14.1 percent rise in the first three months of the year. In June Miller announced plans to buy back up to $20 million of its stock.

Jim Campbell, who heads the Chattanooga firm Campbell Asset Management, said investors have seen starts and stops in the American economy.

"We've got a consumer whose psyche is very fragile," he said. "The economy might pick up later this year."

Ethan Harris, head of North America economics for Bank of America Merrill Lynch Research, said the economy is in rehab.

"I'm cautious in the short run. It's going to be tough particularly in the near term," he said in Chattanooga last week.

Still, Wall Street ended the second quarter Thursday on an upswing, rising for a fourth consecutive session.

Regional business activity grew more than expected in June, lifted by a jump in new orders, the Institute for Supply Management-Chicago said.

Campbell said the economy is improving, though it's still impaired. Consumers continue to deleverage and businesses remain cautious about borrowing, he said.

One positive is that interest rates are staying at low levels, which is a plus for consumers, Campbell said.

"We've positioned clients heavily in bonds, particularly longer term bonds," he added.

Harris said he doesn't believe the Federal Reserve Board will raise interest rates anytime soon and throw off the economy's recovery.

"They don't want to send the patient home too early," he said.

Harris added that worry about inflation is a misplaced.

"It's hard to get serious inflation today in the U.S. economy," he said.