Aug. 17 (Bloomberg) -- U.S. stocks have fallen in the past month to their lowest prices relative to earnings since a) the 1990s, b) last October, c) neither, or d) both.

The answer hinges on whether ``earnings'' refers to historical profits for members of the Standard & Poor's 500 Index or analysts' estimates of their future profits. There's a split between the two that indicates share prices may be unable to sustain yesterday's rebound.

At the day's low, the S&P 500 was valued at 15.8 times earnings for the past 12 months, according to data compiled by Bloomberg. The ratio was the lowest since January 1991, when the index fell to 14.1 times profit.

The price-earnings gauge last fell below 16 in May 1995, when the Internet bubble was beginning to inflate. By the time the S&P 500 peaked in March 2000, its value had almost tripled.

There's nothing so compelling about comparisons based on current-year profit estimates. The S&P 500 closed yesterday at 14.8 times the average forecast, just above its average of 14.5 times for the past two years.

As recently as June 2006, the index was valued at less than 13 times projected earnings. The peak of 16.6 times was reached last month before the current crisis in credit markets, sparked by mortgage defaults, dragged down stocks.

Put all the numbers together and d) is the correct response. As a result, the S&P 500 may be hard-pressed to rise after heading off its first 10 percent decline -- also known as a correction -- since March 2003.

Falling Estimates

Forecasts may carry more weight because corporate profits fluctuate from quarter to quarter and year to year. The swings can make historical earnings less reliable as an indicator of what's to come.

Analysts have trimmed their growth estimates since the end of June, according to Bloomberg data. The third-quarter average fell by a full percentage point to 4.8 percent and the fourth- quarter figure dropped 0.3 point to 12.3 percent. The latest numbers don't reflect changes made this week.

Companies have consistently exceeded these kinds of projections in the past five years. Second-quarter profits at S&P 500 members increased by 10.6 percent, more than double the 4.6 percent estimate when the period ended.

Yet anticipation of sustained profit growth may fail to overcome concern that stocks have further to fall. Some analysts compare the current slump to 1998, when Russia defaulted on debt and the Long-Term Capital Management LP hedge fund collapsed.

Smaller Decline

``The pattern of selling is similar, albeit in a shorter time span,'' John Davi, an equity-derivatives analyst at Merrill Lynch & Co. in New York, wrote in a report yesterday. Stocks are dropping as they did in July-October 1998, the report said.

Back then, the S&P 500 tumbled 19 percent from its July peak before hitting bottom in October. That's more than twice its 8.9 percent loss in the past month.

Share prices are low enough relative to past earnings to suggest they won't fall so far this time. The problem is that one can't draw the same conclusion from profit forecasts.

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It's highly unusual for a company to close a business that it has agreed to sell. Yet that's exactly what H&R Block Inc. should do, according to Mark Sproule, an analyst at Thomas Weisel Partners LLC.

H&R Block, the largest U.S. tax preparer, would be better off shutting its Option One subprime unit than completing the proposed sale to Cerberus Capital Management LLC, Sproule wrote in a report yesterday.

Keeping Option One solvent may cost more money than the Kansas City, Missouri-based company stands to receive in the buyout, the report said.

``The cheapest plan for current shareholders would be an immediate exit,'' said Sproule, based in New York. He has an ``overweight'' rating on the company's stock.

H&R Block didn't react publicly yesterday. The company's only communication was a letter, filed with regulators, which criticized activist investor Richard Breeden over procedural issues in a proxy fight. Breeden wants three board seats.

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During yesterday's commemorations of the 30th anniversary of Elvis Presley's death, the company that controls his estate reached its own milestone. It wasn't one that its shareholders would want to celebrate.

CKX Inc., which holds an 85 percent stake in Elvis Presley Enterprises Inc., gave back the last of the stock-market gains that followed its acceptance of a buyout offer on June 1. The New York-based company closed yesterday at $10.33, down from $10.63 on the day before the $1.3 billion bid was accepted.

Chief Executive Officer Robert F.X. Sillerman and Simon Fuller, who sold the company that created the ``American Idol'' television program to CKX three years ago, want to pay $13.75 a share. The stock's decline indicates their effort won't succeed.

CKX's other assets include a joint venture with soccer star David Beckham and his wife Victoria, a singer reuniting with the Spice Girls. Beckham scored his first goal and first assist for Major League Soccer's Los Angeles Galaxy two days ago. His feat did no more to help the shares than all the Presley hoopla.

To contact the writer of this column: David Wilson in New York at dwilson@bloomberg.net

Last Updated: August 17, 2007 00:18 EDT