Oct. 11--In the waning days of the worst of the economic decline since the Great Depression, most stocks in companies with strong presence in Northeast Pennsylvania were up in the third quarter.

However, there's much uncertainty if the climb will continue into the fourth quarter.

Of the 71 publicly traded companies tracked by Business Weekly, financial companies topped the bottom of the list with the biggest declines. In a flip, some perennial laggards rebounded, including some retailers.

Only 13 of the 71 companies saw their shares lose value in the quarter and 58 gained as some faith was restored in the market. The S&P 500, Dow Jones industrial average and Nasdaq each were up around 15 percent.

The laggards

Financial companies continued to suffer, but not as severely as in past quarters.

The biggest declines were Dunmore-based community bank First National Community Bancorp Inc., which, through some board members, found itself tangentially associated with controversies. Board member Michael Conahan resigned under suspicioun of accepting bribes as a Luzerne County Judge in the so-called "Kids for Cash" scandal. Chairman Louis A. DeNaples, who owned Mount Airy Casino Resort, is fighting to regain his seat on the board, from which he took a leave of absence to resolve issues with his gaming license. And board member Michael Cestone resigned after a partnership he was involved with defaulted on a loan from the bank.

FNCB also shaved back its regular dividend and found it necessary to raise $25 million in capital through a bond issue. Those events likely contributed to shares losing one-fifth their value.

Also among the down financials was Clarks Summit-based Comm Bancorp Inc., which slid 13 percent.

That's a contrast to banks that stood up through the banking crisis, particularly large banks such as Bank of America Corp., PNC Financial Services Group Inc, and M&T Bank Corp., said Brian Kupchik, of Clarks Summit-based Capstone Wealth Management. Banks such as Fidelity D&D Bancorp, Norwood Financial Corp. and NBT Bancorp Inc., held their own with modest gains and bigger banks did even better.

"Being able to borrow money at 0 percent and lend it out at 5 or 6 percent has its advantages," Mr. Kupchik said of banks' positive performance.

The economic decline hurt energy companies, particularly electric, as demand for power short-circuited and economic woes made it harder for utilities to collect outstanding bills. Shares of PPL Corp. were down 7 percent.

The gainers

Dogs became darlings of the third quarter with long-languishing stocks bouncing back.

Shares in Nexstar Broadcasting Group Inc., which could have been purchased for less than a cup of coffee three months ago, more than tripled in value to $3.42. Bon Ton Stores Inc. shares doubled. Macy's Inc. and communication company RCN Corp. each saw shares increase more than 50 percent.

"Those stocks had priced in Armageddon -- bankruptcy and meltdown," Mr. Kupchik said. "What we see now is a return to normal valuation, but there are a lot of questions that remain."

After being beaten by inclement weather events in 2008, insurer Unitrin Inc. is riding a wave of improved profits and capitalization. Recently, it announced it would maintain dividend level. The company's shares were up 64 percent.

Mr. Kupchik is cautious for the fourth quarter. The improved third quarter stock results were because of increased earnings due to slashing costs by cutting jobs. Those job losses force people to cut back or stop consumption, spending Mr. Kupchik said the economy needs to fully rebound.

"At the end of the year, the question will be whether companies get by with the remaining workforce or will they add jobs? Will demand rebound even with double-digit unemployment?"

Contact the writer: dfalchek@timesshamrock.com

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