Stocks of local interest took a beating in the second quarter, with 62 of the 77 stocks losing value and with average losses at least three times national trends.
Of 51 local stocks trading on the New York Stock Exchange, 42 declined in the quarter. Seven stocks gained ground and two were flat. Combined, the stocks lost 9 percent of their value.
Of 26 local stocks on the Nasdaq, NYSE MKT and over-the-counter bulletin board, 20 finished in negative territory. Four finished positively and two were flat. The combined loss was 14 percent.
The local numbers compare with a decline of 2.5 percent for the Dow Jones Industrial Average, a 3.3 percent drop for the Standard & Poor's 500-stock index and a 5.1 percent slip for Nasdaq Composite Index.
"There's still a great deal of concern over risk," said Dominick Pullano, president of Rochester brokerage PCM Associates Ltd. "That's why, I think, we don't see a sustained move in the markets, and it tends to be very concentrated when a move comes."
Treasury securities are at their low yields, Pullano said, with five-year bonds yielding less than during the depths of the recession in 2008 and 2009.
"That tells me there's a high need for safety," he said. "That's why, when we do see some upturn, it doesn't tend to last because there's that fear of things reversing. I think that's what happened in the second quarter."
The largest percentage gain among local NYSE stocks was from Verizon Communications Inc., which rose 14 percent to $43.70 on June 30. No NYSE company with local headquarters posted an increase.
Document Security Systems Inc.-a former American Stock Exchange holding now on the renamed NYSE MKT-gained 23 percent, to $3.83.
The American Stock Exchange (AMEX) was acquired in 2009 by NYSE Euronext. NYSE Amex LLC was renamed NYSE MKT LLC on May 14.
Over-the-counter stock GateHouse Media Inc. gained a penny, or 17 percent, to 7 cents a share. NYSE MKT company IEC Electronics Inc. was up 9 percent, to $5.89. Torvec Inc., an over-the-counter stock, rose 7 percent, to 90 cents.
The biggest hit on a percentage basis among non-NYSE stocks was taken by Transcat Inc., which fell 47 percent to $7.13.
"They're still optimistic, but the percentage increase in their annual earnings rose less than the prior year," Pullano said. "The perception is-and I'm not sure if it's accurate or not-that growth there is slowing."
Transcat in May reported net income of $3.3 million, or 43 cents a diluted share, for fiscal 2012, up 18 percent from $2.8 million, or 37 cents a diluted share.
"Because, on a macroeconomic basis, the outlook is cautious, these companies are going to get hit a little bit more," Pullano said.
The nervousness spread to some companies that have weathered the recession better than most. Monro Muffler Brake Inc., for one, fell 19 percent in the quarter, to $33.35.
"It's really all about the outlook," Pullano said. "Monro Muffler had very good numbers, but the forecast projected some caution. That's what caused the stock to back off."
Pullano expects the bumpy ride to continue throughout the second half of 2012.
"This has been a very streak-oriented market, with some sudden turns," he said. "Most of the returns were made in the first six weeks of the year, from Jan. 1 to mid-February. Buy-and-hold strategies have been very difficult to get returns with, because of these corrections.
"These times make it very important for more-active management. I try to be a little more active with clients at this time. Hopefully, that pays off."
7/13/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.