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McDonald’s Post-Black Monday Advance Leads Dow: Chart of the Day

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Oct. 19 (Bloomberg) -- McDonald’s Corp. has reason to celebrate today’s 25th anniversary of the stock-market crash that sent the Dow Jones Industrial Average to its biggest-ever percentage loss.

As the CHART OF THE DAY depicts, shares of McDonald’s rose at a 12.8 percent annual rate from what’s known as Black Monday through yesterday, according to data compiled by Bloomberg. The advance for the world’s largest restaurant chain is the biggest among 14 companies in the Dow industrials that were part of the average when the crash occurred.

“McDonald’s is a powerhouse,” said Robert Stovall, who ran his own money-management firm in 1987 and is now a managing director and global strategist at Wood Asset Management Inc. in Sarasota, Florida. “The future holds well for them, just like the past has.” Wood Asset owns shares as part of a strategy focused on dividend growth, he said.

McDonald’s, based in the Chicago suburb of Oak Brook, Illinois, just beat Atlanta-based Coca-Cola Co., the world’s largest maker of soft drinks. Coke climbed 12.7 percent a year on average. Procter & Gamble Co., the Cincinnati-based maker of consumer products, ranked third at 12.3 percent. All three were well ahead of the Dow average, which rose at an 8.6 percent pace after falling 22.6 percent in the crash.

The worst performer of the past quarter-century that’s still part of the Dow is Alcoa Inc., which also appears in the chart. Alcoa, based in New York, gained 2.2 percent a year after the crash. The rate reflected a 69 percent plunge in shares of the largest U.S. aluminum producer in 2008.

Five companies removed from the average after 1987 posted losses in post-crash trading. Three of them -- Bethlehem Steel Corp., Eastman Kodak Co. and General Motors Corp. -- filed for bankruptcy. The others were Goodyear Tire & Rubber Co., which fell at a 2 percent annual rate, and Navistar International Inc., which fell at a 3.4 percent pace.

To contact the reporter on this story: David Wilson in New York at dwilson@bloomberg.net

To contact the editor responsible for this story: Chris Nagi at chrisnagi@bloomberg.net

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