75% of Non-Technology Issues Recover From Post March 2000 Crash

NEW YORK, March 8 /PRNewswire/ -- 304 of the 404 non-technology issues currently in the S&P 500 are now trading at a price level higher than that of their March 24, 2000 close when the S&P 500 reached its all-time high of 1527, Standard & Poor's, the leading provider of independent investment research, ratings and indices, announced today. Technology issues, however, remain well below their March 24th level, with only 11 of the 78 companies posting gains over the past five-years.

The prices of technology issues within the S&P 500 more than tripled in 1998 and 1999, but declined over the next two and a half years by 82%. Since hitting their low point in October 2002, technology issues have rebounded by over 80%. "The net result is that technology issues remain 68% off their March 2000 highs, and that it would take a gain of 209% just to bring it back to where it was five-years ago," explains Howard Silverblatt, Equity Market Analyst at Standard & Poor's. "On average, most issues within the S&P 500 have recovered and are actually showing gains. However, on a weighted basis, the enormous losses of high-cap technology issues have weighed down the market, resulting in a 20% loss."

In February 2000, technology issued accounted for 35% of the market. At that time, six of the top ten issues in the S&P 500 by market value were technology issues, representing a combined market value of $1.88 trillion. The combined market value of those six companies is now $0.77 trillion - a $1.11 trillion loss. Today, only 2 of the 6 issues remain in the top ten and the representation of technology stocks within the S&P 500 now stands at 15%, down $2.3 trillion.

"The massive gains of the late 90's and the devastating losses resulting from the 2000 crash represent the risk-reward trade off that investors face with every investment," adds Silverblatt. "The enormous P/Es paid by investors for promised growth in year 2000, have now been replaced with a more cautious investor who is saying 'show me the money'."

Going forward, Standard & Poor's one-year bottom-up price projections call for a 10.9% gain in the S&P 500, with 396 issues gaining in price and 103 falling. However, there remains a wide variance by sector. Continuing its long road to recovery, technology is expected to record the strongest performance with 69 of the 80 issues expected to gain. The energy sector, which has gained over 50% in the past year, is expected to break even with 14 of the 28 issues expected to gain.

Standard & Poor's data shows that, looking back over the 5-year time period, dividend-paying issues substantially outperformed non-paying issues. Payers have averaged an annualized return of 19.8% with 307 of the 359 gaining in price. This compared favorably to the non-payer's average annualized return of 3.4%, with only 39 of the 113 gaining in price.

AVERAGE ISSUE CHANGE FROM FEBRUARY 2000 SECTOR ISSUES AVERAGE ISSUES AVERAGE %CHANGE UP %CHANGE Consumer Discretionary 85 106.7 63 156.3 Consumer Staples 36 110.7 32 126.6 Energy 28 220.0 26 241.1 Financials 75 113.1 68 127.8 Health Care 51 132.1 36 199.6 Industrials 56 115.3 49 137.5 Information Technology 78 -35.3 14 89.0 Materials 31 109.6 29 117.6 Telecommunication Services 9 -35.5 2 8.1 Utilities 33 92.8 27 123.1 S&P 500 482 91.8 346 146.7 Dividend payers 369 114.4 307 144.5 Non-payers 113 18.2 39 164.2 AVERAGE ISSUE CHANGE FROM FEBRUARY 2000 SECTOR WEIGHTED MARKET VALUE ISSUES AVERAGE MARKET VALUE CHANGE DOWN % CHANGE % CHANGE $ MILLIONS Consumer Discretionary 22 -35.5 3.0 36,483 Consumer Staples 4 -16.6 30.3 278,124 Energy 2 -54.0 99.4 489,864 Financials 7 -29.9 63.1 828,332 Health Care 15 -30.0 25.8 277,118 Industrials 7 -39.5 34.5 320,818 Information Technology 64 -62.5 -57.1 -2,256,464 Materials 2 -5.8 62.4 135,262 Telecommunication Services 7 -47.9 -43.6 -259,133 Utilities 6 -43.6 80.8 155,573 S&P 500 136 -47.8 0.1 5,976 Dividend payers 62 -34.8 Non-payers 74 -58.7 TOP 10 ISSUES BY MARKET VALUE, FEBRUARY 2000 COMPANY SECTOR MARKET MARKET MARKET MARKET VALUE VALUE RANK RANK 2/2000 2/2005 2/2000 2/2005 $ MILLIONS $ MILLIONS Microsoft Corp Information Technology 465,158 275,701 1 2 Cisco Systems Information Technology 452,217 115,533 2 18 Genl Electric Industrials 434,305 309,462 3 1 Intel Corp Information Technology 377,533 184,667 4 8 Exxon Mobil Energy 260,087 270,806 5 3 Wal-Mart Stores Consumer Staples 217,654 240,811 6 4 Oracle Corp Information Technology 209,499 43,490 7 50 Lucent Technologies Information Technology 189,655 15,933 8 132 Intl Bus. Machines Information Technology 185,218 137,721 9 11 Citigroup Inc Financials 174,686 222,250 10 5 TOP 10 ISSUES 2,966,012 1,816,377 S&P 1-YEAR PROJECTED TARGET PRICES AVERAGE UP DOWN WEIGHTED % CHANGE ISSUES ISSUES % GAIN Consumer Discretionary 8.89% 73 13 12.30% Consumer Staples 10.76% 33 3 14.02% Energy -0.19% 14 14 -1.18% Financials 8.12% 62 20 12.42% Health Care 8.74% 47 8 8.29% Industrials 6.15% 41 16 5.69% Information Technology 15.39% 69 11 22.58% Materials 6.12% 24 8 1.09% Telecommunication Services 6.57% 7 3 7.06% Utilities 4.57% 26 7 5.22% S&P 500 8.59% 396 103 10.92% About Standard & Poor's

Standard & Poor's, a division of The McGraw-Hill Companies , is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research, data and valuations. With 6,000 employees located in 21 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit http://www.standardandpoors.com/.