3. Financial Stocks Outperform
Year-to-date, the Financial Select Sector SPDR (NYSE:XLF) is up 20%, doubling the return of the broad market. In 2011, while the SPX was virtually flat, the financial sector sagged more than 18% after getting clobbered in the third quarter and bouncing back slightly in the fourth.
Banks and brokers have shown increased strength despite continued concerns on a macroeconomic level. One reason for this is earnings growth, which was stronger in this sector than anywhere else during the fourth quarter.
2. Apple Hits $500…and Then $600
While it’s no surprise that Apple (NASDAQ:AAPL) remains everyone’s favorite stock market darling, its sheer indefatigability is nothing short of impressive. Year-to-date, Apple shares are trading 50% higher. The stock conquered the $500 level in mid-February and the $600 mark in late March.
The company has weathered the loss of its founder/chief visionary, a PR nightmare due to its Foxconn manufacturing plant and vague ennui surrounding the announcement of its latest iPhone and iPad models. Right now, the real surprise will be if and when Apple stops moving higher or even begins a sharp decline. And who’s to say if any of us will be ready for it.
1. The Market Rebounds
Gas is near $4 a gallon, economic concerns remain palpable all over the eurozone, unemployment is at a three-year low but still above 8% and a Presidential election year has friction running at a fever pitch. Oh, and many investors lost a decent chunk of their portfolios in the second half of last year.
And yet. Optimism and buying enthusiasm have driven the market higher this year, recovering a lot of those portfolio losses. The SPX is up 10% for the first three months of 2012, and the Dow has gained 7%. The tech-rich Nasdaq, meanwhile, is up 18%. And all three indices have breached significant round-number levels: The SPX took out 1,300, the Dow topped 13,000 for the first time since early 2008, and the Nasdaq is now back over 3,000 after more than a decade below this millennium mark.
Honorable Mentions (a/k/a, “Knock Me Over With a Feather”):
A few stories didn’t really throw us off guard when they hit the Street. Facebook announcing plans for an initial public offering, for example, or fuel prices resuming their upward trajectory. Hand in hand with rising oil and gas prices was an unsurprising hike in airline ticket costs.
Another foregone conclusion was Eastman Kodak (PINK:EKDKQ) filing for bankruptcy. The venerable company has been struggling to steady its footing in a digital environment for years, and it never executed a lifesaving strategy. The stock has been delisted from the NYSE, and the company said it will no longer make digital cameras, choosing instead to focus on photo printers, software and other new businesses.
So that’s it. What market story shocked you over the last three months?
As of this writing, Beth Gaston Moon owns shares of Apple and Green Mountain.