“We’ve moved past the apex” of the credit crisis, Legg Mason’s Robert Hagstrom said at a recent conference. “We felt the bottom of the market was (the March bailout of) Bear Stearns. You needed the sacrificial lamb — unfortunately, it was Bear Stearns,” the growth-fund manager said.
Value manager Brian Rogers of T. Rowe Price Associates agreed. “This cycle feels a lot like ’90-91,” when banks were forced to raise capital amid losses on high-yield investments and commercial projects. “The recovery was pretty dramatic.”
Hagstrom said that as long as the difference in yield between Treasurys and other bonds continues to narrow — signaling a greater willingness to take risk — the stock market should do well. “If the market is up 10 percent, financials will be up 20 percent,” he said.
Investments in U.S. financial companies by sovereign wealth funds are also encouraging.
Stocks got a boost in April.
April was a good month for U.S. stocks, as the Standard & Poor’s 500 index rose 4.8 percent for its best monthly gain since December 2003.
The uptick snapped a five-month string of losses, a cumulative 14.6 percent. Still, U.S. stocks made up only 37 of the top 100 global stocks, according to Russell Indexes.
The top stock was International Greetings PLC, a British maker of gift wrap and stationery, that gained 169 percent for the month.
The top U.S. stock on the list was Hythiam (HYTM), a small-cap health care services management company, with a 124 percent return.
Airline surcharges reach three figures.
Oil prices well above $100 per barrel have airlines scrambling to survive. To compensate, many have been hiking the “fuel surcharges” embedded in their ticket prices. Now, such surcharges can add $110 to domestic roundtrip fares.
The average transatlantic fuel surcharge, by comparison, is $230 roundtrip, according to the fare- tracking website . The old-line airlines, excluding such low-fare carriers as JetBlue and Southwest, have tried hiking airfares 14 times so far in 2008.
It looks as if 10 have been successful, says Rick Seaney, chief executive of . Delta’s chief executive said last month that U.S. carriers need to raise ticket prices by 15 to 20 percent just to break even.
Sequoia Fund opens to new investors.
One of the giants of the mutual-fund industry, the Sequoia Fund (SEQUX), has reopened to new investors.
For the first time since 1982, investors can get into the value fund, run by investment adviser Ruane, Cunniff & Goldfarb.
The minimum initial investment is $5,000; $2,500 for IRAs.
Stan Choe and Ji Qi, The Associated Press
