Telecom stocks might prevent S&P's 'Perfect 10'

Telecommunications could be the only sector of the Standard & Poor’s 500 index that won’t post a double-digit gain this year.

Up 7.4 percent through Monday’s close, telecom stocks may hinder a “Perfect 10.” That’s when all 10 sectors of the S&P 500 post a gain of 10 percent or more.

The last time that happened was 1995, when the overall index rose 34 percent. There have been several years of significant annual gains since then, but none that were fueled by all the sectors recording double-digit jumps. This year, the other nine sectors have climbed from a low of 10 percent for utilities, to a high of 38 percent for health care.

Telecom companies are viewed in a similar light to power companies. Demand for their services is steady, but their growth prospects are limited. The compensation for investors holding these stocks is a big dividend payment. Even so, large gains aren’t out of the question.