Investors News Flash

The S&P 500 Index recovered half of its losses since the fall of Lehman
July 28th, 2009

The Standard & Poor's 500 Index has recovered 50% of its losses after the collapse suffered last September, following the bankruptcy of Lehman Brothers Holdings Inc.; this is as a record number of U.S. companies exceeded their forecasted earnings. Last Thursday, the index climbed to 976.29 points (2.3%), thus obtaining the highest close since November 2008. On March 9th of this year, the index showed its worst fall in 12 years, and from that moment, the index has registered a rise of 300 points, reaching 39% recovery.

In this context, Goldman Sachs raised its forecast for the S&P 500 Index, in reference to the stimulus of an increased income in the second half. According to his scenario, the benchmark for the U.S. index will end the year with 1060 points, 15% above its level since last June 30th. According to the average of the 10 leading Wall Street strategists, the year-end forecast for the S&P 500 index now stands at 997 points.

The bankruptcy of Lehman Brothers Holdings Inc. on September 15th, 2008, triggered a decline of more than 575 points, which triggered the loss of USD 6.8 trillion in the U.S. equity markets. At this moment, investors are returning to the equities, as the bull run is the fastest since the Great Depression. Just last week, mutual funds in the United States received a total of USD 1,500 million of net inflows.

Following, you will find a chart showing the recovery that the index has taken since March 9th, 2009.

SP500 Performance graph

Source: Bloomberg

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