Summer slump hits local firms
* Miller Industries closed Wednesday at $19.54 per share, down 2.1 percent in the quarter * Mohawk Industries closed Wednesday at $181.79 per share, down 4.8 percent in the quarter * Covenant Transport closed Wednesday at $17.97 per share, down 10 percent in the quarter * Unum Group closed Wednesday at $32.08 per share, down 10.3 percent in the quarter * CBL and Associates Properties closed Wednesday at $13.75 per share, down 15.1 percent in the quarter * Astec Industries closed Wednesday at $33.51 per share, down 19.9 percent in the quarter * Dixie Group closed Wednesday at $8.36 per share, down 20.4 percent in the quarter
U.S. stocks rose across the board Wednesday following big gains in Asia and Europe, a buoyant end to the worst quarter for the market in four years.
From worries over a slowing Chinese economy, uncertainty over interest rates and a scary slide in commodity prices, stocks have been hit with one blow after another in the past three months. But on Wednesday, investors were in the mood to buy, especially stocks that have been battered recently. Energy companies and raw material suppliers, the biggest losers in the quarter, rose more than 2 percent each.
For the third quarter from July through September, the Standard & Poors 500 index was down 6.9 percent, while the Dow Jones Industrial average fell by 7.6 percent. The quarterly decline came despite a robust 1.9 percent, or 35.94 points increase, in the S&P on Wednesday and a 1.5 percent, or 235.57 point rally, on the Dow Jones Industrials during the final day of the third quarter.
The past three months were even harder on most Chattanooga publicly traded companies. Among the seven major stock-traded companies based in the Chattanooga area, all fell during the third quarter and four had double digit declines in the three-month period.
The rocky third quarter began with fears over Greece's debt, then moved on to worries about a rout in Chinese stocks, signs of slowing growth in the country and plunging currencies in developing countries that export to it. The S&P 500 dropped more than 10 percent in August from his May high, a drop known on Wall Street as a "correction."
"It's been ugly," said John Canally, an investment strategist at LPL Financial. "We hadn't had a 10 percent pullback since 2011, and people forget how to act."
All five of the biggest drops in the year for the S&P 500 occurred in the last three months. Investors were so jumpy, they even sold on news that previously would have triggered buying. When the Federal Reserve announced earlier this month that it would hold off raising interest rates, the S&P 500 slipped.
But on Wednesday, investors mustered enough courage to buy even biotechnology companies, breaking an eight-day streak of drops for the battered sector.
The buying began at the opening of trading and swept across all 10 sectors of the Standard and Poor's 500 index. Among the big gainers Wednesday, fashion company Ralph Lauren jumped 14 percent after announcing a new CEO would take over from its namesake founder.
Tim Courtney, chief investment officer of Exencial Wealth Advisors, said it was only a matter of time before investors started buying given the recent drops.
"I've been surprised we haven't had rallies like the one we're seeing now," Courtney said. After "so many negative days, you're going to get a bounceback."