History Favors Santa Claus Rally

NEW YORK (TheStreet) -- The failure of the so-called super committee may have increased the degree of difficulty but stocks typically do pretty well during the holidays.

According to recent data from Birinyi Associates, Santa Claus has comes through with a rally the majority of the time over the past two decades, and surprisingly, the discretionary sector doesn't always lead the way.

Since 1990, the S&P 500 has been positive 76% of the time for the period running from the Monday prior to Black Friday until the end of the calendar year, delivering an average gain of 2.2%. Through Monday's close, the index was down 5.1% so far in 2011 on a price basis.

The discretionary sector -- which includes retailers, media, consumer services companies and others -- has been in the green 71% of the time, enjoying an average gain of 2.8%.

Pretty good but lagging behind the industrial sector, up 86% of the time with an average advance of 3.1%; utilities, also rising 86% of the time with an average gain of 2.5%; and health care and utilities, both up 76% of the time with average rises of 2.3% and 4.3% respectively.

As for individual stocks, Birinyi provided two separate breakdowns. One lists S&P 500 components that have traded higher at least 85% of the time since 1990, and the other shows index members that have been up less than 45% of the time.

It should be noted that not all the stocks featured in the tables have trading histories going back 20 years. Eleven of the 31 companies on the best performers list were trading publicly in 1990, while 16 of 29 companies on the weak side of the ledger have been trading for that long.

Eight companies have been higher every year during the holiday season, Birinyi notes, but none of them have a trading history going back more than 10 years. Of this group, Monsanto (MON) has the lengthiest track record, and its average gain is 12.2%. So far in 2011, shares of the St. Louis-based seed and herbicide producer have risen 1.5%.

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