TOM MAST Star-Tribune staff writer | Posted: Sunday, January 6, 2008 12:00 am
{M3Troubles in the financial sector and a slowdown of discretionary spending helped weigh down year-end numbers of a regional stock index.
The Davidson 99, which tracks the performance of 99 stocks in seven Northwestern and Rocky Mountain states, finished 2007 ahead by 6.9 percent.
This compared to a 6.4 percent gain for the Dow Jones Industrial Average, a 3.5 percent increase for the S&P 500 and an increase of 9.8 percent for the NASDAQ composite index.
Fred Dickson, director of private client research and chief market strategist for Great Falls, Mont.-based D.A. Davidson and Co., said consumers grew wary about what lies ahead for the economy, which was reflected in more modest spending.
"The extreme discretionary items seem to be put on the backburner," he said.
He noted that the stock price of specialty apparel retailer Zumiez, which has a store in the Eastridge Mall was down 45 percent, home exercise equipment maker Nautilus was off 39 percent and Internet diamond retailer Blue Nile was down 28 percent.
During the fourth quarter, resource companies were particularly good performers, a trend Dickson expects to continue over the first half of 2008.
Energy companies, metals and mining, and general technology and components all should do well, he added.
"We may have seen the worst of the pressure on the financial services stocks," Dickson said.
But if the bad news keeps coming, the sector will continue to get clobbered.
Overall, Dickson said the regional index did reasonably well, considering losses incurred by regional banks on concerns about a residential construction slowdown.
"As we look into 2008, I think it's going to continue to be a bumpy ride for investors," he said.
Twenty-four stocks in the Davidson 99 gained more than 25 percent in 2007. Chipotle Mexican Grill led the way with an increase of 158 percent, followed by Amazon.com up 135 percent and Flir Systems up 97 percent.
The worst performers were clothier Coldwater Creek, Inc., down 73 percent; Washington Mutual, Inc., which was hammered by the subprime mortgage mess, down 70 percent; and Nautilus Group Inc., off 65 percent.
Stock of the one Wyoming-based company, U.S. Energy, declined by 15 percent for the year.
"The Davidson 99 Regional Index made gains during the year but also experienced many of the same fluctuations as the major market indices, reflecting the enormous volatility of energy prices, global geopolitical tensions, the effects of the ongoing subprime mortgage situation and the impact of the housing slowdown on the overall economy," said Dickson.
The Davidson 99 is comprised stocks from companies operating within Colorado, Idaho, Montana, Oregon, Utah, Washington and Wyoming.
The stocks were selected based on market capitalization, importance within their sectors and importance in the states they represent.
Business Editor Tom Mast can be reached at tom.mast@trib.com, or call 307-266-0574.