WASHINGTON – One month after the terrorist attacks of Sept. 11, shares of some of Maryland’s largest publicly traded companies are slowly inching their way back to pre-attack levels.
There are two notable exceptions: Marriott International is struggling while Lockheed Martin is soaring, trends that are representative of their respective market sectors.
A look at 20 of Maryland’s largest publicly traded companies shows that most are trading at lower levels than they were on Sept. 10, just before the stock market closed for four days following the terrorist attacks in New York and Washington. But analysts say the stock market, and by extension, Maryland companies, are on the rebound.
Anirban Basu, director of applied economics at a Towson University economics studies institute, said Maryland stocks, with a few exceptions, have performed generally as expected: They experienced severe declines in share prices after Sept. 11 and then rebounded substantially, but not completely.
“A lot of Maryland companies have bounced back quite nicely,” Basu said.
One company that has not had to bounce back is defense contractor Lockheed Martin, which saw major gains in its stock immediately following the attack and has only continued to climb. Its stock has increased 21 percent, from $38.32 on Sept. 10 to $46.39 at the close of business on Oct. 11.
Coventry Healthcare, McCormick & Co. Inc., and the Ryland Group have also experienced gains in their stock prices over the past month.
Shares for Marriott International, the state’s largest lodging corporation, dropped significantly over the last month. Marriott has rebounded a little, but is nowhere near its pre-attack levels. The company traded at $40.85 on Sept. 10 but closed at $33.77 on Oct. 11 — a difference of 17 percent.
Basu said Lockheed Martin has done “spectacularly well.” He holds little optimism for Marriott right now, however, saying the outlook for the tourism industry is much worse than for other sectors.
He said the region has followed a national pattern of decline and rebound.
“Companies were affected by a short-term panic on Wall Street,” Basu said. “But things are beginning to settle down.”
Many analysts agree that the stock market is in fact regaining the value it lost just after Sept. 11. They attribute the recovery to a host of factors.
Bruce McDermott, managing director at Deutsche Banc Alex Brown, attributes the recent stock market gains to U.S. military action in Afghanistan and the economic stimulus package under discussion by Congress, which could inject $150 billion into the economy. McDermott said the package, which is the “most fiscally aggressive” proposal ever put forth by Congress, will restore confidence and make investors more optimistic.
Cary Leahey, a senior economist at Deutsche Bank Securities, said the problem with predicting the future of the market is that we have no historical precedents. He said it is unclear what shape the conflict with Afghanistan will take — whether it will last six weeks like the Persian Gulf war, or several months.
“We have to say to ourselves, what will be the spark to get people feeling better about themselves,” outside of a visible military success, he said.
But judging by the “ugly” September employment and consumer spending reports, he said we haven’t seen the bad news yet.
-30- CNS 10-12-01