American companies disliked by analysts, seen as high risk in the bond market and popular with those who bet against shares, have led the stock market’s gains during the past two months.

Out performance by these stocks, including Calpine and General Motors, may be a last gasp for a bull market that began more than two years ago, according to investors such as Donald Yacktman.

“It’s a sign of desperation – they’re trying to find anything,” said Mr. Yacktman, who oversees $1.1 billion at Yacktman Asset Management in Chicago. His namesake fund has a five-year annualized return of 18%, compared with a 2.3% decline for the Standard & Poor’s 500 Index.

“This is one of the toughest markets I’ve seen in 38 years.”

The S&P 500 has gained 1.8% this quarter after rallying as much as 7% from this year’s low, reached on April 20. The advance was trimmed last week as oil prices rose above $60 a barrel and companies including Ford gave up quarterly gains.

Shares of lower-quality companies, as measured by an S&P rating system, led the market’s advance. The firm, better known for bond ratings, gives stocks a letter grade from A+ to D based on their history of profit and dividend growth.

The 29 companies that have C ratings in the S&P 500 have been this quarter’s best performers, rising by 16% on average. The 44 with the highest rating, A+, have added 2.1%, according to S&P.

C- rated companies outpaced the highest-rated in 2003. Since the end of that year, stocks with the lower rating have dropped 5.9% and A+ companies have gained 2.6%. Both have trailed the 8.1% rise in the S&P 500.

Eight of the 10 best performers in the S&P 500 from April 20 to June 17 have corporate-bond ratings. Six, including GM, are rated below investment grade by S&P or Moody’s Investors Service. Of the six, only LSI Logic rose last week. GM fell with Dynegy, Delphi, KB Home, and Visteon.

Nine of the 10 stocks on the New York Stock Exchange with the most short-selling have risen since April, according to data compiled by Bloomberg. Companies with more than 10% of shares sold short, or borrowed and sold to profit from falling prices, accounted for two of the S&P 500’s five biggest gains from its low on April 20.

Calpine, one of the two, surged 52% on optimism that a plan to sell power stations and idle money-losing plants will avert bankruptcy. Almost half of its stock available for trading was sold short. The other is KB Home, the sixth largest home builder by market value, which climbed 40%.

GM has climbed 17% this quarter amid a $1.16 billion investment from billionaire Kirk Kerkorian. Among analysts, the stock is the most disliked in the Dow Jones industrial average, according to Bloomberg.

Nine analysts rate GM a “sell,” while five have “hold” recommendations. Five analysts rate the stock “buy.” At the start of the S&P 500’s rally, it was also among short-sellers’ biggest bets in the benchmark. 14% of the shares available for trading were sold short in April.

Ford, whose bonds have a junk rating from S&P, retreated 9.5% to $10.28 last week. The no. 2 American automaker cut its 2005 earnings forecast for the second time this year. The stock had jumped 21% during the market’s rally.

Delphi is the least-liked S&P 500 stock among analysts, according to Bloomberg. Even so, it ranked among the quarter’s leaders before tumbling 8.1% last week.