The best stocks of 2010

December 27, 2010

For all the doom and gloom associated with the broader economy—historic unemployment in the United States, debt woes and mandated austerity in Europe—it’s been a remarkably positive year for the stock market. As we enter the last week of 2010, the S&P 500 index is up nearly 13 percent for the year. That’s far from a record (1954 witnessed a breakneck 45 percent rise), but at least the index this year climbed above the level hit before Lehman Brothers declared bankruptcy in September, 2008. The stock comeback story is not unique to America, either; this week, Korea’s stocks hit their highest level in more than three years.

At one time, the gurgling stock market would have been a fairly reliable predictor for a healthy economy in the near future—and who knows, that may still be the case. More bearish observers point to artificial stimulants, like an unsustainable commodity bubble and the Fed’s quantitative easing policy.

Regardless, a lot of equity holders will be popping Champagne (or prosecco) this week. Our chart below shows the top ten performers in the S&P 500 for the year—so what does it tell us? Well, the best-performing stock of the year is Cummins Inc., an Indiana-based company that makes power generators and diesel engines. Not surprisingly, its strong market performance this year is based on healthy sales abroad, particularly in emerging markets enjoying the rise in commodity prices. Another top performer has been AIG, the once-mighty insurer which lost nearly all of its value in 2009 but has made a strong comeback thanks to a massive taxpayer bailout. Two other financial firms that also flirted with the abyss made the top ten.

Looking at much of the rest of the list, you’d be forgiven for thinking we are living through a second dot-com boom. It includes Web-accelerator Akamai, veteran travel site priceline.com, enterprise software firm salesforce.com, and telecom service provider Qwest Communications. One Web star that didn’t make the list is Netflix, which is up an astonishing 233 percent this year. If Netflix can sustain growth like that in 2011, it will likely make the chart next year, because this month it was added to the S&P 500.

No comments so far

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

[...] This post was mentioned on Twitter by D. B., Anthony Wes. Anthony Wes said: The best stocks of 2010: At one time, the gurgling stock market would have been a fairly reliable predictor for … http://bit.ly/hemYS3 [...]

[...] The best performing stocks in the S&P 500 in calendar year 2010 is listed in Table 2.  http://blogs.reuters.com/globalinvesti ng/2010/12/27/the-best-stocks-of-2010/   [...]