Chattanooga: Most stocks tumble

Chattanooga: Most stocks tumble

April 1st, 2009 by Mike Pare in Business

Area companies continued to feel the pain of the worst economy in decades as almost no business escaped the market turmoil so far this year in spite of an upbeat March.

"It's been a fairly severe and difficult environment," said Mickey Robbins of the Chattanooga investment planning firm Patten & Patten.

The share price of shopping center developer CBL & Associates Properties Inc. sustained a more than 63 percent drop in the quarter.

Many financial companies, banks and floorcovering businesses also were hit hard in the period. Even consumer products maker Chattem Inc. wasn't immune as its shares fell more than 21 percent in the quarter.

Mr. Robbins said most businesses are challenged by the tough economy. Residential construction is weak, and unemployment is expected to continue rising for two or three more quarters, he said.

But, Mr. Robbins said, the odds are that investors have seen the worst.

Commodity prices are picking up, and while a lot of homes are being bought at distressed prices, buyers are coming in, he said.

"Homes sales where prices are low have picked up," Mr. Robbins said.

In addition, the federal initiatives related to housing and banking will have a positive impact, though those will take time.

Chris Hopkins of Barnett & Co. said some say there is a 50-50 chance the Obama administration's banking effort will work.

"I'm even more optimistic than that," he said, adding he thinks there is a better than even chance of breaking the credit logjam.

Mr. Robbins said he's hopeful the economy will stabilize later this year and then show signs of life in 2010.

He said China has embarked on a big stimulus program. Expectations are that its economy will continue to grow in the mid-single digits, Mr. Robbins said.

On Tuesday, advancing issues outnumbered decliners by more than 3 to 1 on the New York Stock Exchange, where volume came to 1.64 billion shares.

The advance on Tuesday was also supported by "window dressing" buying as large investors not wanting to end the quarter with large amounts of cash loaded up on stocks they think have good prospects.

Technology shares got a lift Tuesday from a deal between The Walt Disney Co. and Google that will allow Google's video site YouTube to show short-form videos from Disney's ABC and ESPN networks.

The Associated Press contributed to this story.