Wall Street likes Steelers as market indicator
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Wall Street's bulls breathed a sigh of relief when the clock ran out on the New York Jets' Super Bowl dreams.
Not only has the stock market never had a losing year when the Pittsburgh Steelers have appeared in the championship game, it racked up a double-digit loss the only time the Jets did.
If past performance were any indicator of future returns, investors could expect Wall Street to be about 20 percent higher by the end of this year.
The Dow Jones Industrial Average has risen an average of 19.5 percent -- excluding dividends -- in the Steelers' seven Super Bowl years, more than double the Dow's average annual performance since the game was first played in 1967.
The Standard & Poor's 500, a much broader market index, has delivered similarly stellar results in Steelers Super Bowl years -- rising an average of 20.9 percent. That compares with an average annual S&P 500 advance of 7.9 percent since 1967.
Meanwhile, after "Broadway" Joe Namath -- a Beaver County native who would be considered a wallflower compared to many of today's NFL celebrities -- guided the Jets to the 1969 Super Bowl championship, the S&P 500 finished the year down 11.4 percent. The Dow did even worse, tumbling 15.2 percent.
Investors who put stock in Super Bowl indicators can also take heart from the Green Bay Packers' return to the game after an absence of 13 years.
In the four years they played in the Super Bowl, the Dow has gone up an average of 14.6 percent and the S&P 500 advanced an average of 21.4 percent. Their averages were goosed by the fact that the Packers made appearances in 1997 and 1998, when the greatest bull market in history swung into high gear.
As providential as the Steelers' influence on Wall Street may seem, it is nothing more than a "serendipitous coincidence," according to John Frankola, of Vista Investment Management in Pittsburgh.
"One would be hard pressed to make a direct connection between these two outcomes," he said.
However, Mr. Frankola said the Steelers' latest trip to the Super Bowl coincides with another indicator that is based on more solid footing empirically. Historically, Wall Street has performed better, on average, in the third year of a president's term than it has in the other three years.
Since 1929, the S&P 500 has produced average annual total returns, including dividends, of 18.3 percent in the third year of a president's term, he said. There has not been a down third year since 1939, he added.
First Published January 31, 2011 12:00 am
