The stocks of Richmond-area companies generally finished the second quarter and the first half of 2014 with strong gains.
The Richmond Index, which includes the stocks of 16 companies with headquarters in the region, ended the second quarter on Monday with a gain of 5.59 percent for the three-month period.
The index gained 11.35 percent for the six-month period from the start of the year to the end of June.
The quarterly performance was a bit better than the broader markets, which finished the second quarter strong after a bumpy start to the year. The Dow Jones industrial average posted a gain of 2.4 percent for the second quarter. The Nasdaq composite index rose 5 percent, while the Standard & Poor’s 500 index rose 4.7 percent.
“It has been great,” Jamie Cox, managing partner at Harris Financial Group in Chesterfield County, said about the first half of 2014 for stocks. “What is most important and impressive is the follow-through …from the strong year in 2013,” he said. “I think what the market is telling us is that underlying economic data is not indicative of what is happening in the economy.”
Thomas K. Garner, managing partner at Kanawha Capital Management LLC in Henrico County, said stocks continued to benefit from accommodative monetary policy, strong corporate profits and high dividend yields compared with fixed-income alternatives.
“Investors seemed to discount much of the weakness in first-quarter economic data, treating it as an outlier event due largely to bad weather,” Garner said. “The markets are optimistic that economic growth in the coming quarters will return to levels sufficient to sustain expansion in corporate earnings.”
Ten of the 16 companies on the Richmond Index saw gains for the second quarter, while 11 had gains for the first six months of the year.
The index, created by Bloomberg News in 1994, includes companies in a diverse range of industries such as banking, insurance, tobacco, coal, manufacturing, media and distribution. The index hit a record high Tuesday, closing at 643.08.
Leading the local stocks for the quarter and first six months was the packaging giant MeadWestvaco Corp., which saw its stock gain 17.59 percent for the second quarter and 24.11 percent for the first six months of the year. The company reported rising profit for the first quarter and also implemented a $300 million stock buyback program in February.
Companies known for solid dividends such as Altria Group Inc. and Dominion Resources Inc. also performed well for the quarter and the year, Cox said.
The worst performer on the Richmond Index for the quarter and the year so far was James River Coal Co., which filed for Chapter 11 bankruptcy protection in April, a result of the coal industry’s struggles with low prices. James River Coal, which has been attempting to sell itself, saw its shares fall 74.44 percent since the beginning of the year. Its stock is down 47.99 percent in the second quarter.
One local company dropped off the Richmond Index during the quarter. In early June, the dietary supplements maker Star Scientific Inc. changed its name to Rock Creek Pharmaceuticals Inc. and moved its headquarters to Sarasota, Fla. It had been based in Henrico County.