Market highs and lows hit area companies in 2007

Public companies in the suburbs showed incredible gains or incredible losses in the stock market during 2007, an extreme pattern evident in nearly every industry.

Such extremes were found within the local technology, finance, manufacturing and retail sectors. Companies had gains of about 50 percent or losses for just as much.

"The market suffered more from fear than it did from reality," said Diane Swonk, chief economist and senior managing partner at Mesirow Financial in Chicago.

Swonk and other analysts said all industries showed a remarkable spread, based on their relationship with the sluggish economy, a drowning auto industry or, especially, the mortgage default crisis.

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"The financial sector took a big hit because of the subprime crisis and the Chicago market was not immune," said Swonk. "In the broader sense though, Chicago was not hit as hard as say, New York, but the Chicago financial sector held up a little better with some mixed news here."

Financial firms with mortgage lending units suffered the most as record numbers of homeowners went into foreclosure last year. Lake Forest-based Wintrust Financial Corp. and Itasca-based First Midwest Bancorp Inc. took it on the chin.

However, the Chicago Board of Trade's merger with the Mercantile Exchange to form the CME Group closed at a healthy 34.6 percent higher.

A winning area was the local health care and pharmaceutical sector, which showed the most advances with double-digit stock growth for Libertyville Township-based Abbott Laboratories, Deerfield-based Baxter International Inc., Lake Forest-based Hospira Inc. and Lake Forest-based Stericycle Inc.

Abraxis BioScience Inc., formerly American Pharmaceutical Partners Inc. in Schaumburg, took the lead with 80 percent and even made No. 8 on The Associated Press list of Best New Stocks on Nasdaq.

"Health care, in general, was the farthest place from the consumer and mortgage woes and became a really hot sector," said Jack Ablin, chief investment officer for Harris Private Bank in Chicago.

Many publicly traded companies went private during 2007, including Vernon Hills-based CDW Corp. and Chicago-based Tribune Co.

The technology sector, which reeled from some bad years, started to wobble back nationwide. Local companies, such as Schaumburg-based Motorola Inc., Lisle-based Molex Corp., LaFox-based Richardson Electronics, Naperville-based Tellabs Inc. and Aurora-based Westell Technologies, all went into double-digit dives.

Paris-based Alcatel-Lucent, with operations in Naperville and Lisle, had the biggest loss at 48.5 percent.

Motorola, which had a 22 percent drop, ranked sixth in most active volume on the New York Stock Exchange.

"You also have to realize that many companies really held their own very nicely in 2007, which was a very volatile year," said David Klein, senior vice president/financial consultant for RBC Dain Rauscher Inc. in Vernon Hills.

"The market had three major corrections of about 1,000 points or more and yet they held their own."