The investment meltdown of 2008 that plunged the financial markets into their worst year in seven decades also engulfed stocks throughout the Bay Area.

Local investment experts believe that 2009 will be an improvement over 2008 for Wall Street. But that's not saying much.

"It has to get better," said Richard Welty, president of Lafayette-based Welty Capital Management.

A stock market rebound, though, might not materialize right away. That is because investors remain queasy about the economy.

"There is still a lot of uncertainty about whether we have reached the bottom of the economic downturn," said Jeffrey Elfont, president of Walnut Creek-based Pinnacle Capital Management.

Perhaps one encouraging sign emerged from the wreckage for the stock markets. The final three months of 2008 pointed to an easing of the losses that savaged stocks during the year as a whole.

"The market always recovers and I expect it will again this time," said Cass Candell, a Berkeley-based investment executive with American Investors Co.

During the fourth quarter of 2008, a Bloomberg-compiled index of Bay Area public companies declined 25.4 percent, while a Bloomberg index of East Bay public companies fell 22.1 percent.

By comparison, the Dow Jones Industrial Average fell 19.1 percent, the broad-based S&P 500 declined 22.6 percent and the tech- laden Nasdaq Composite slumped 24.6 percent.

The Nasdaq Biotech Index was the best-performing major stock benchmark tracked by this newspaper, dropping 12.7 percent in the October-December quarter. The Bloomberg Real Estate Index was the weakest performer, plunging 39.8 percent.

Among the top East Bay performers for the quarter:

-- Westaff jumped 106 percent, primarily because Select Staffing offered to buy Westaff. The Walnut Creek-based staffing services firm also sold its Australia and New Zealand subsidiaries for $15 million.

-- SuperGen Inc. rose 35 percent. The Dublin-based life sciences company reported better-than-expected sales and a loss that was about one-tenth what analysts predicted.

-- Fremont-based Digital Power Corp. was up 27 percent. The company reported profits that were nine times larger than the year before.

-- Questcor Pharmaceuticals Inc. rose 27 percent. The Union City- based life sciences firm received an outperform rating from Oppenheimer.

-- Pleasanton-based Thoratec Corp. was up 24 percent. A study determined that the company's new mechanical heart pump out- performed an older one, boosting the new device's prospects for broader use.

-- 3Par Inc. rose 18 percent. The Fremont-based data storage company landed a major deal with Lawrence Livermore National Laboratory to provide storage systems for the lab's fusion research.

-- Orinda-based Intraware Inc. was up 9 percent. The long-time software firm agreed to be purchased by another tech company.

The best-performing Bay Area company during the quarter was Redwood City-based Genelabs Technologies Inc. GlaxoSmithKline Plc offered $57 million for Genelabs, seeking to obtain Genelabs' research into hepatitis C drug treatment.

Fremont-based Asyst Technologies Inc. was the worst-performing company in the entire Bay Area during the quarter. The semiconductor equipment maker's stock plummeted 90 percent in the fourth quarter.

Asyst announced "significant" cost reductions and warned that the slump in the chip equipment industry would last well into 2009.

So when will stocks improve? Local experts believe sometime during 2009. But the financial experts interviewed for this story don't expect a huge improvement on Wall Street.

"People are looking for the economy to improve sometime in 2009 and they think earnings will pick up by the summer," Welty said. "Stocks should start moving up in anticipation of an improving economic scenario."

George Avalos covers jobs, economic development, commercial real estate, finance and oil companies. Reach him at 925-977-8477 or gavalos@bayareanewsgroup.com

(c) 2008 Oakland Tribune. Provided by ProQuest LLC. All rights Reserved.

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