Led by shares of its two largest companies, Walt Disney Co. and Amgen Inc., the LABJ 200 Stock Index far outgained the broader indexes last week.
When Disney and Amgen started climbing out of the hole they fell into following the attacks of Sept. 11, they helped drag the weighted index higher. The two posted gains of 14.2 percent 4.5 percent respectively for the week ended Oct. 3.
The overall LABJ 200 was up 8 percent, while the Dow and Nasdaq were off 2.2 percent and 4.2 percent respectively for the same period.
The index, as a whole, followed the lead of its largest components in recouping earlier losses, with all 18 sectors of the LABJ 200 posting gains for the week.
Disney closed at $19.91 on Oct. 3, up 14.2 percent on the week, but still well below the Sept. 10 close of $23.58. It is down 31.2 percent on the year. Its market cap now stands at $41.7 billion.
Amgen, which now has a market cap of $62.7 billion, closed at $59.84 on Oct. 3, up 4.5 percent on the week. It is still below the $64.13 it posted at the end of trading on Sept. 10 and is down 6.4 percent year-to-date.
The gain leaves the LABJ 200 7.4 percent off of the market’s Sept. 10 close, minimal damage relative to the three-week decline of the Nasdaq (15.8 percent) and the Dow (12.1 percent).
Local restaurant and retail stocks staged the largest percentage resurgence, adding 19 percent in stock value during the week.
As customers overcame fears associated with the attacks, restaurants like California Pizza Kitchen Inc. and Cheesecake Factory as well as retailer 99 Cents Only Stores performed strongest.
Unlike the restaurant industry overall, Cheesecake reported a minimal drop-off in sales during the weeks after the attack, stating that average sales for the weeks ended Sept. 18 and Sept. 25 were off last year’s levels just 4 percent and 3 percent, respectively.
The market rewarded Cheescake’s third quarter performance, as the stock finished up 16.8 percent for the week. CPK, which had lost 15 percent of its value during the week the markets reopened, bounced back by closing at $18.41 Oct. 3, nearly a 21 percent gain over the previous week.
John Glass, an analyst with Deutsche Bank in New York, said CPK was particularly hard hit after the market reopened because of its “mall exposure and urban exposure” and security-related fears in the wake of the terrorist attacks. “The stock was beaten down,” said Glass.
Though it dipped along with the rest of the market in the days after the market reopened, shares of 99 Cents Only Stores took nine trading days to return to pre-attack levels as sales increased when customers stocked up on staples.
Computer game makers Activision Inc. and THQ Inc. also performed well, gaining 22 percent and 14 percent respectively. The computer games industry benefited as a whole from price cuts in Sony PlayStation II hardware, according to Wedbush Morgan Securities research analyst Miguel Iribarren.
Overall, LABJ 200 software stocks picked up 15 percent in value for the week.
Univision Communications Inc. benefited from a general resurgence in local media stocks, which as a group gained 14.2 percent on the week. After the Spanish-language media company reported a 12 percent increase in its prime time audience, Univision’s stock jumped nearly $3 on Oct. 3, finishing 27 percent up for the week.
Not surprisingly, aerospace and defense stocks continue to trade far above Sept. 10 levels. Having gained 9 percent in value last week, the local aerospace sector is up 29 percent since the markets reopened.
