Friday, September 05, 2008

August Was A Tough Month For Dividends

As I noted in an earlier post this week, the dividend payers under performed the non payers in the month of August. It wasn't just performance where the dividend strategy struggled though.

In the month of August, only 8 companies increased their dividends versus 17 in August of 2007.

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dividend increase in August 2008 Standard & Poor's noted that:
"Outside of the S&P 500, the numbers are worse with 43 decreases (the most decreases since 1982 with 60 decreases), and 114 increases which is the least amount of increases since 2002 (108)."
For overall market performance a few positives were evident in the market:
  • "breadth turned positive, with 320 issues gaining (average +7.01%) and 177 declining (average -5.31%)."
  • a rotation out of energy and materials and into early cyclical sectors, like consumer discretionary, may have begun last month. Discretionary stocks made the largest contribution to the S&P's performance last month by returning 7.03%.
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S&P 500 Index sector return contribution August 2008
Lastly, the market's action today may have served as a near retest of the lows reached in July. Constructively, higher downside volume, a capitulation type trading day, would certainly allow for making a stronger case for higher prices longer term.

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S&P 500 Index chart analysis September 5, 2008

Market Attributes Snapshot S&P 500 (PDF)
Standard & Poor's
By: Howard Silverblatt
August 2008

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