INDIANAPOLIS - The nation's financial meltdown battered most of Indiana's largest companies last year, costing some of them three- quarters or more of their stock value.

Companies in the Bloomberg Indiana Index lost nearly half their value in 2008, although some on the index fared much worse, The Indianapolis Star reported Thursday.

Cummins Engine, among the state's largest companies based on revenue, lost 79 percent of its value, while Steel Dynamics of Fort Wayne lost 81 percent of its value.

Only six of the 55 Indiana-based companies or companies with significant ties to the state that are on the index actually gained value during 2008.

Together, the companies on the index lost more than $217 billion, or 47 percent in value, making them less able to borrow money or expand and more likely to lay off workers.

Nationally, companies in the Dow Jones Wilshire 5000 Index - the broadest index of companies publicly traded - lost 39 percent of value, or about $6.9 trillion.

Indiana was also disproportionately affected by mortgage foreclosures, driven by escalating subprime loan interest rates that left thousands of Indiana residents unable to afford their house payments.

The state's strong manufacturing base and its ties to the distribution industry made Indiana more vulnerable than many states, said Matthew Will, associate professor of finance at the University of Indianapolis.

He said those industries were affected early in the recession.

"When the economy is doing well, we do better than the national economy. When the economy does poorer, we fare worse than the national economy," Will said.

It's unclear when the economy will bottom out and whether 2009 will be a turnaround year, although many observers expect that many Indiana companies will face more hardship in 2009.

"I hate to be the bearer of bad news. I actually believe that 2009, at least through the first two quarters, might be more difficult than 2008," said Bob Jones, chief executive officer of Evansville-based Old National Bancorp.

Trouble was on the economic horizon as 2008 began, but what followed surprised most observers. On Sept. 29, the Dow Jones Industrial Average fell about 800 points, its largest drop in history.

In West Lafayette, furniture manufacturer Chromcraft Revington and sporting-goods maker Escalade both saw their shares fall 92 percent in 2008.

Escalade moved production of its table-tennis tables from Evansville to Mexico.

Chromcraft ended furniture production at its Delphi plant and plans to outsource that work mostly to Asia.

The companies' moves and layoffs contributed to Indiana's unemployment rate, which was 7.1 percent in November while the nation's was 6.7 percent.

The economic downturn has proved so significant that even stocks related to health care - an industry sometimes referred to as being "recession-proof" - took a hit.

Indianapolis-based insurance giant WellPoint lost 52 percent in value; Warsaw orthopedics implant maker Zimmer Holdings, 39 percent; and drug maker Eli Lilly and Co., 25 percent.

"This is one of the worst years ever, even including the '30s," said Mark Foster, chief investment officer for Kirr, Marbach & Co., an investment firm in Columbus.

Evansville-based Accuride, which makes components for commercial vehicles, was relegated from trading on the prestigious New York Stock Exchange to the OTC Bulletin Board exchange in 2008 as its shares lost 97 percent of their value.

That drop made Accuride the worst-performing stock on the Bloomberg Indiana Index.

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