2008: Winners and losers
About the only winners in the worst stock market since the Great Depression were discount retailers and the brewers and tobacco growers that were boosted by takeovers.
The two stocks in the 30-member Dow Jones industrial average that rose were Wal-Mart Stores Inc., the discount retailer, and fast-food giant McDonald’s Corp. Fast Retailing Co., the operator of Japan’s Uniqlo discount clothing stores, soared 63 percent. St. Louis-based Anheuser-Busch Cos., the owner of Budweiser beer, jumped 31 percent, but only after InBev NV agreed to acquire it to create the world’s biggest brewer. UST Inc. surged 27 percent after Altria Group Inc. offered to buy the snuff and cigar company.
Only 8 percent of the 1,693 stocks in the MSCI World index of 23 developed markets defied last year’s rout, after more than $1 trillion in bank losses and writedowns at the world’s biggest financial companies caused the first simultaneous recessions in the United States, Europe and Japan since World War II. About 80 percent of the companies that sell consumer staples, the category that includes beer makers and chain stores, retreated.
"Even the classic defensive stocks didn’t do their job." said John Wilson, co-director of equity strategy at Morgan Keegan & Co., which manages $120 billion in Memphis, Tenn.
More than $30 trillion was erased from equity markets worldwide in 2008. The Standard & Poor’s 500 index tumbled 38 percent.
Twenty-eight national benchmarks lost more than half their value, led by the 67 percent drop in Russia’s Micex index, a 66 percent retreat in China’s CSI 300 index and a 52 percent decrease in India’s Sensex index. The U.K.’s FTSE 100 index posted the smallest decrease among the world’s 20 biggest markets, slumping 31 percent.
The MSCI World Consumer Staples index fell 25 percent, even with gains by Anheuser-Busch, UST and discount retailers.
Anheuser-Busch rose to $68.58 from its 2007 close of $52.34 before its purchase by Leuven, Belgium-based InBev in November faxless cash advance. The merger created a brewer with more than 200 brands including Budweiser, Stella Artois and Beck’s.
UST of Stamford, Conn., closed at a record high of $69.38 on Wednesday, boosted by Richmond, Va.-based Altria’s $69.50-a-share offer. UST reported third-quarter profit in October that fell less than analysts estimated as promotions helped sales of its top-selling Copenhagen and Skoal brands.
Discount stores increased on speculation consumers will seek out bargains as economies slow around the world. Fast Retailing, based in Japan’s Yamaguchi prefecture, said November sales at Uniqlo stores open at least 12 months jumped a record 32 percent.
Get more business news, blogs and opinionWal-Mart’s same-store sales climbed 3.4 percent in November and may have risen almost 3 percent in December, according to the Bentonville, Ark.-based company. Oak Brook, Ill.-based McDonald’s, the world’s largest restaurant company, said global sales expanded 7.7 percent in November after promotions of $1 double cheeseburgers and coffee.
Wal-Mart shares gained 18 percent in 2008, while McDonald’s rose 5.6 percent.
"People are going to cut back where its easier to cut," said Jeffrey Schappe, who helps manage $16 billion as chief investment officer at BB&T Asset Management Inc. in Raleigh, N.C. "But they still have to buy groceries and clothing, and with clothing they’ll buy clothes that are less trendy and more of a value."
With reporting by Adam Haigh in London.