AFT Index stocks rebound

After sliding last month, AFT Index stocks came back into the positive column to end 1.91 percent higher than April’s close. Of the 17 stocks tracked in our index, advancing issues outpaced declining issues by a 3-to-1 margin, with one unchanged. The index added 23.07 points to close at 1,231.71.

Major markets, except for the tech-heavy Nasdaq, posted strong gains for our session ended May 15, 2006.

The trade gap dropped unexpectedly in March, but so did consumer sentiment—to a seven-month low. The Federal Reserve raised rates in the final week of our trading period, as was widely expected, and left the door open to more rate hikes in the future. Wall Street was hoping that the door would be firmly closed, but the Fed suggested only that it might pause in boosting interest rates.

“The most likely outlook is that they will pause at the June meeting, but if growth does not slow this summer, they will be tightening by August,” said Mark Zandi, chief economist at Moody’s Economy.com.

Shares of AvalonBay Communities, Inc., jumped this session on news that the company’s first quarter funds from operations (FFO) rose 22 percent, to $86.8 million, or $1.15 per share, from $71.2 million, or 96 cents per share a year earlier.

AvalonBay said better community operating results and funds from newly developed properties contributed to the gain. The company’s results also blew past analysts estimates: Those surveyed by Thomson Financial were expecting $1.06 per share. AvalonBay rose 5.83 points, or 5.76 percent, and closed at 107.08. It was our top dollar gainer this month.

Colonial Properties shed 1.65 points this session, or 3.50 percent, and ended at 45.47 after first-quarter profit fell. Colonial reported net income of $5.5 million, or 12 cents per share, for the quarter ended March 31, 2006, compared to $69.9 million, or $2.51 per share during the year-earlier quarter.

Slimmer gains on asset sales and increased amortization, depreciation, and interest expenses resulting from growth in company assets were responsible for the decline. Colonial was our top dollar loser.

Despite reporting a widening loss in its first quarter, shares of Associated Estates Realty Trust gained 0.98 points, or 9.40 percent, and ended at 11.40. Associated reported a net loss of $8.89 million, or 51 cents per share, compared with a net loss of $6.84 million, or 35 cents per share, a year earlier.

The company expects to earn between 98 cents and $1.02 per share this year, said Lou Fatica, Associated’s vice president, CFO, and treasurer.

“The majority of our FFO contributions are anticipated to be delivered in the second half of the year as a result of the expected timing of property sales, the redistribution of sales proceeds to pay down debt, and the historically seasonal low FFO experienced during the first quarter,” Fatica said. Associated was our top percentage gainer.

Charter Mac slipped this month, losing 1.13 points, or 5.83 percent, and closing at 18.25. CharterMac earned net income of $14.7 million, or 23 cents a share, in the first quarter, compared to $14.8 million, or 25 cents per share in the year-earlier quarter. CharterMac was the top percentage loser this month.