NEW YORK >> If 2002 felt worse than Wall Street's previous two losing years, there's a good reason. Stock investors really had no place to hide. Investors couldn’t hide
this year, but that may be
good for next yearThree out of four S&P stocks sank this year,
something not seen in more than a decadeBy Amy Baldwin
Associated PressFor the first time in this three-year slide, every one of the 10 broad sectors in the Standard and Poor's S&P 500 index dropped.
Three out of four S&P stocks sank this year, something not seen since 1990, when the market was last in the midst of a bear market.
"Clearly, 2002 was the year the bear market clawed everyone," said Steve Galbraith, chief investment strategist at Morgan Stanley, in a research report.
The S&P 500 is considered the standard for measuring broad market performance, since it includes a representative sample of leading companies in leading industries.
The biggest loser among the sectors was utilities, crushed by energy trading woes in the wake of Enron's collapse and down 35.4 percent through November. Telecommunications, down 30.1 percent, and technology, down 27 percent, followed close behind.
More startling is the poor performance of the market's so-called safer havens. The consumer staples sector is down 6.5 percent so far this year, while materials are off 3.4 percent.
Here's how the five remaining S&P sectors fared: consumer discretionary, down 17.2 percent; energy, down 13.3 percent; financials, down 11.5 percent; health care, down 16.9 percent; and industrials, down 23.9 percent.
"Not only did nothing really work this year, the stuff that usually works didn't," Galbraith said in his report.
Only by slicing thinly can you find sectors that did well. For instance, a Dow Jones list of 86 sectors includes 22 positive performers. Calculating from mid-December 2001 through mid-December 2002, these winners include consumer electronics, up 18.5 percent; casinos, up 12.5 percent; and home construction, up 1 percent.
The widespread despair on Wall Street could turn out to be a good sign for the market's future, said Arthur Hogan, chief market analyst at Jefferies & Co.
"What really indicates that we have bottomed out is that it is not just tech and telecom that corrected. It is across the board. That is an indication that the market has washed out, and that process is important," Hogan said.
Some analysts maintain that broad losses are needed to create a real buyers' market for stocks and turn things around.
"If one buys into the theory that it is darkest before the dawn, those stats would suggest that there might be reason for hope in 2003," said Charles Crane, strategist for Victory SBSF Capital Management.
However, investors need to remain wary, Crane said, noting that for the market to improve, fundamental forces such as profits and economic growth must continue to gain ground.
"Unless one can build a fundamental case for stocks in 2003, those stats are not reason enough to go in blindly," he said.
And, he added, after a year of scandals involving companies and stock analysts, investors need to regain their confidence in corporate America.
Those caveats aside, Crane is cautiously optimistic that next year will be positive for the market.
"I think all of that can happen," he said.
Indeed, while fundamentals are important, there are encouraging technical factors already at play on Wall Street. For instance, Hogan noted that the selloffs following the market's October-November rally have been on light volume, which may indicate that investors are feeling better about committing to stocks.
For the week, the Dow Jones industrials rose 77.61, or 0.9 percent, to close at 8,511.32.
The Nasdaq composite index had a weekly gain of 0.63, or 0.1 percent, and the S&P had a weekly advance of 6.28, or 0.7 percent.
But the Russell 2000 index, which tracks smaller company stocks, had a weekly loss of 1.10, or 0.3 percent.
The Wilshire 5000 Total Market Index, which tracks more than 5,700 U.S.-based companies, ended the week at 8,475.26, up 49.17 from last week.
A year ago, the index was 10,644.81.
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