Jan. 6--A deepening U.S. recession and a meltdown of the global credit and financial market took their toll last year on the Tulsa Index and two national stock indexes.

All three gauges -- the Tulsa Index, the Standard & Poor's 500 and the Russell 2000 -- posted negative returns for the year as well as the fourth quarter. Overall, it was the worst year in the U.S. stock market since 1931, said Jake Dollarhide, the CEO of Longbow Asset Management Co. of Tulsa.

For 2008, the Tulsa Index, based on the Stocks of Local Interest list in the Tulsa World, saw a negative return of 32.5 percent. By comparison, the S&P 500 -- a composite of the nation's largest companies -- was down 37.0 percent for the year. The Russell 2000, an index of smaller companies, had a negative return of 33.8 percent.

The Tulsa Index is made up of companies that have headquarters or other significant operations in the Tulsa World's readership area. Only five of the 68 companies included in the area index saw positive returns in 2008. Three of those were banks.

Although the Tulsa Index significantly outperformed its two national peers from 2005 through 2007, last year it came "back down to earth a little bit," Dollarhide said during a phone interview.

He predicted that the local index will post a single-digit gain in the first quarter, regardless of what the national indexes do.

The fourth quarter was a downer for all three indexes. The Tulsa Index fell 21.1 percent, the S&P 500 was

down 21.9 percent and the Russell 2000 was down 26.1 percent.

In view of all the financial duress that banks experienced last year nationally, to have three banks among the year's top five gainers was a huge surprise, Dollarhide said.

The local index's top gainer for the year was BancFirst Corp. of Oklahoma City, which saw its stock price rise 25.7 percent in 2008 and 10 percent in the fourth quarter.

"Despite a horrendous year for the banking sector, BancFirst was a rare shining star in a tumultuous sea of struggling publicly traded bank holding companies," Dollarhide said.

Other top gainers for 2008 were Wal-Mart Stores Inc., up 20.0 percent; Aaon Inc., up 7.0 percent, International Bancshares, up 7.0 percent and Commerce Bancshares Inc., up 5.3 percent.

Just as the local real estate market was somewhat insulated from housing problems taking place across the country, banks, too, were insulated from the national bank crisis, Dollarhide said.

At least 25 banks failed last year, but none was in Oklahoma, according to the Federal Deposit Insurance Corp.

Dollarhide added that a strong oil and gas industry during the first eight months of the year also benefited the state as well as banks, including those that focus on small business and work with energy-related companies.

Unlike more than 125 U.S. financial institutions that have accepted bailout money, BancFirst is among those that have chosen not to accept funds from the U.S. Treasury, he noted.

"Between the bank's strong capital base and capital ratio, the bank made it obvious that they are a strong entity in today's historically weak environment," Dollarhide said.

The Tulsa Index's top decliner for the year was Dollar Thrifty Automotive Group Inc., which saw its stock price fall 95.4 percent. Other top decliners in 2008 were SemGroup Energy Partners LP, down 91.0 percent; Ram Energy Resources Inc., down 82.5 percent; Dillard's Inc., down 78.4 percent; and Willbros Group Inc., down 77.9 percent.

Laurie Winslow 581-8466 laurie.winslow@tulsaworld.com

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