Currently, as many as 101 ‘blue chip’ stocks listed in the American stock index S&P 500 are selling at a price lower than $10. The cheapest is currently in that index, the stock of the online broker E*Trade, which is trading at 98 cents.
Among the more expensive in that group is the stock of the waste management company Allied Waste, priced at $9.90. Among them are many well-known names, such as Citigroup, whose stock currently stands at $6.40, Alcoa at $8.16, Xerox at $5.58 per share, and Motorola, whose stock is priced at $3.44. Starbucks is trading at $7.97 and Yahoo at $9.14. The number of stocks listed in that index, priced below $10, is the highest in the last 28 years, emphasized Howard Silverblatt, an analyst at Standard & Poor’s (S&P).
According to data from that credit rating agency, this number today is almost double what it was in October 2001, when stocks of 59 companies recorded a price below $10, and nearly three times higher compared to 35 stocks in October 1987. Ten dollars is more than a psychological barrier. Some institutional investors cannot invest in stocks cheaper than $10 because some contracts require companies whose stocks are above that level. Another disheartening fact is that on Wednesday, only five companies whose stocks are listed in the S&P 500 had stock prices above $100. (H)
