So, if we didn’t already know, what have we learned to do the next time stocks are in the red?
Stocks fought off an early session slump Thursday, ending the day with an entirely-familiar-by-now closing kick to fresh two-and-a-half year highs.
The Dow Jones Industrial Average added 30 points to 12,318, the Nasdaq gained 6 points to 2832 and the S&P 500 rose 4 points to 1340.
As blogger Eddy Elfenbein noted on Wednesday, the S&P 500 was able to double in just 492 trading sessions dating back to March 6, 2009 — and clearly stocks are doing their best to reach third base.
More interesting perhaps than the day’s winning or losing sectors is the idea that much of the recent push higher in stocks this month — all stocks, that is — has been fueled by small-caps beginning to close the gap with their larger brethren. The Russell 2000 was up 0.9% on Thursday and has gained nearly 7% in February alone.
As we saw in 2010, the ramp higher in small-caps suggests, if nothing else, that momentum shouldn’t be messed with — investors are continuing to feel frisky enough to add more and more risk in their portfolios.
Of course, there were winners and losers on Thursday, and nothing was as powerful as the surge in commodities. Let’s start with silver, which popped nearly 30% to set a 30-year high of $31.58 an ounce. Yes, a 30-year high. Gold, slouch that it is, only rose 0.6%.
Speaking of historical events, cotton prices climbed — to more than $2 a bushel for the fist time ever. Yes, ever.
Oil prices also got into the swing of things, rising 1.6% to $86.36 a barrel. Natural gas, however, did not, falling 1.3% on the heels of an uninspired inventory report.
Unsurprisingly, sectors like pipelines, precious metals miners, and iron & steel companies were among the strongest performers of the day. Shares of Williams Cos. (NYSE:WMB) carried pipeline companies after a strong earnings report, a 60% dividend boost, and a plan to split into two entities.
Also winning, in a mild surprise given the equities bullishness, were bonds. The 10-year note saw its yield fall to 3.57%, its lowest ending level in two weeks.
A thoughtful approach suggests bonds and stocks can’t both be “right” for long, but betting against anything going up these days is a dicey proposition.
