By: Rob Black - Tue, 21 Feb 2012 16:40:27 -0800
Loser: Wall Street Can’t Hold Dow 13,000Stocks erased gains, after the Standard & Poor’s 500 Index failed to hold above its highest close since 2008, as approval of Greece’s bailout was offset by economic concern with crude oil jumping to a nine-month high. Airlines were a big loser on the oil news.Wal-Mart, the world’s biggest retailer, fell 3.9 percent as low prices hurt margins. Energy shares had the biggest gain in the S&P 500 among 10 industries as Chevron rallied 1.6 percent. Stocks are still the only game in town, but when you reach a headline level, there’s always some fallback. The S&P 500 has added 8.3 percent this year. Reported 12-month earnings for its companies increased 9.4 percent to $96.58 a share, the highest level ever. The index is trading for 14.1 times reported earnings, compared with the average since 1954 of 16.4 times. The S&P 500 is approaching the cheapest level ever compared with bonds as zero-percent interest rates drive investors and companies from cash. Profits that doubled since 2009 pushed the index’s so-called earnings yield to 7.1 percent, close to the highest on record when compared with the 10-year Treasury rate,
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