NEW YORK – The stock market is poised for a “Perfect 10.”
As stocks surge this year, putting them on course for their best annual performance in a decade, all ten industry groups in the Standard & Poor’s 500 index are closing in on gains of 10 percent or more for 2013.
That hasn’t happened in almost two decades.
The last year that all 10 industry groups in the S&P 500 closed the year higher by 10 percent or more was in 1995, when the overall index rose 31 percent. There have been several years of big yearly gains since, but none that has seen all the sectors notch double-digit jumps.
The S&P 500 gained 26 percent in 1998, but materials and energy stocks fell. The broader index advanced 26 percent in 2003, but phone companies and makers of consumer staples fell short of the 10 percent hurdle.
The reason for the broad gains this year? It’s the first time since the Great Recession that investors are starting to believe that the economic recovery, while tepid, is sustainable, says Natalie Trunow, chief investment officer at Calvert Investments, an investment manager.
The housing market is recovering, hiring has picked up, and people are less scared of losing their jobs. That has helped boost consumer confidence and support spending.
“Only 12 months ago, the markets were not convinced that we were in recovery mode,” says Trunow, who notes there were fears the economy could slide back into recession as recently as this summer.
Here are the 10 industry groups in the S&P 500 index, which is up 26 percent so far in 2013, and how each sector has performed:
Health care: Some stocks in this sector offer the prospect of explosive growth because of new drugs or medical devices. Other, more established names like Pfizer tempt investors with attractive dividend yields.
This year’s gain: 36 percent.
Consumer discretionary: This year’s gain: 36 percent.
Industrials: Delta Airlines and Southwest Airlines are among the biggest gainer in this sector. This year’s gain: 31 percent.
Financials: Banks, insurers and other financial stocks have gained on optimism that the industry is healing after the financial crisis and the Great Recession. This year’s gain: 30 percent.
Consumer staples: Makers of essential, everyday products might not offer the most exciting growth prospects, but they pay a healthy dividend. This year’s gain: 22 percent.
Energy: U.S. oil prices rose, and U.S.-based drillers increased production dramatically, helping push domestic production to the highest level in more than two decades. This year’s gain: 20 percent.
Information technology: Big things were expected from the technology industry at the start of the year. Corporations were supposed to invest in technology to boost productivity. This year’s gain: 19 percent.
Materials: This year’s gain: 18 percent.
Utilities: Power companies are seen as safe and steady. This year’s gain: 10 percent.
Telecommunications: Phone companies could keep the S&P 500 from its “Perfect 10” status. They are the laggards in the index and the only group falling short of 10 percent gains. This year’s gain: 8 percent.
As stocks surge this year, putting them on course for their best annual performance in a decade, all ten industry groups in the Standard & Poor’s 500 index are closing in on gains of 10 percent or more for 2013.
That hasn’t happened in almost two decades.
The last year that all 10 industry groups in the S&P 500 closed the year higher by 10 percent or more was in 1995, when the overall index rose 31 percent. There have been several years of big yearly gains since, but none that has seen all the sectors notch double-digit jumps.
The S&P 500 gained 26 percent in 1998, but materials and energy stocks fell. The broader index advanced 26 percent in 2003, but phone companies and makers of consumer staples fell short of the 10 percent hurdle.
The reason for the broad gains this year? It’s the first time since the Great Recession that investors are starting to believe that the economic recovery, while tepid, is sustainable, says Natalie Trunow, chief investment officer at Calvert Investments, an investment manager.
The housing market is recovering, hiring has picked up, and people are less scared of losing their jobs. That has helped boost consumer confidence and support spending.
“Only 12 months ago, the markets were not convinced that we were in recovery mode,” says Trunow, who notes there were fears the economy could slide back into recession as recently as this summer.
Here are the 10 industry groups in the S&P 500 index, which is up 26 percent so far in 2013, and how each sector has performed:
Health care: Some stocks in this sector offer the prospect of explosive growth because of new drugs or medical devices. Other, more established names like Pfizer tempt investors with attractive dividend yields.
This year’s gain: 36 percent.
Consumer discretionary: This year’s gain: 36 percent.
Industrials: Delta Airlines and Southwest Airlines are among the biggest gainer in this sector. This year’s gain: 31 percent.
Financials: Banks, insurers and other financial stocks have gained on optimism that the industry is healing after the financial crisis and the Great Recession. This year’s gain: 30 percent.
Consumer staples: Makers of essential, everyday products might not offer the most exciting growth prospects, but they pay a healthy dividend. This year’s gain: 22 percent.
Energy: U.S. oil prices rose, and U.S.-based drillers increased production dramatically, helping push domestic production to the highest level in more than two decades. This year’s gain: 20 percent.
Information technology: Big things were expected from the technology industry at the start of the year. Corporations were supposed to invest in technology to boost productivity. This year’s gain: 19 percent.
Materials: This year’s gain: 18 percent.
Utilities: Power companies are seen as safe and steady. This year’s gain: 10 percent.
Telecommunications: Phone companies could keep the S&P 500 from its “Perfect 10” status. They are the laggards in the index and the only group falling short of 10 percent gains. This year’s gain: 8 percent.