U.S. Stocks Drop as Crisis Causes S&P 500’s First Decade Loss
By Nikolaj Gammeltoft
Jan. 1 (Bloomberg) — U.S. stocks fell this week, limiting an advance that sent the Standard & Poor’s 500 Index to its biggest annual increase in six years. The 2009 rally failed to rescue investors from the worst return for any decade.
Ford Motor Co. dropped 1.3 percent for the week, bringing its decade loss to 80 percent after the credit crisis threatened to push the carmaker into bankruptcy last year. Apple Computer Inc., the iPhone maker that beat analysts’ profit estimates for 19 straight quarters, climbed 0.8 percent, extending a 720 percent advance over the last 10 years.
This past year’s rally wasn’t enough to restore money lost in two bear markets after the Internet bubble collapsed in 2000 and more than $1.7 trillion in global bank losses sent the index to a 38 percent decline in 2008. The S&P 500 posted an average decrease of 0.9 percent a year since 1999 including dividends, the first negative return for a decade since data began in 1927, according to S&P analyst Howard Silverblatt.
“This dispelled two myths,” said Robert Arnott, founder of Research Affiliates LLC, which oversees $47 billion in Newport Beach, California. “The notion that investment gains are easy, and the notion that stocks will win for the patient investor, no matter what we pay.”