Quarter's end gives investors urge to reassess

— -- Anyone regretting they didn't sell in May at the bull market peak might be looking at the strong finish to the first half and remembering the '80s hit by The Clash: Should I Stay or Should I Go?

The second quarter ended with the Standard & Poor's 500 enjoying its best percentage gain of the year on Friday, at 2.5%. An agreement to hold together the eurozone gave investors hope that European leaders will finally remove a dark cloud hovering over the U.S. market.

"Europe has addressed one of the market's big concerns," says Michael Jones of RiverFront Investment Group. "It doesn't solve everything, but it begins the timetable to solve the other things."

The breakthrough in Europe, which allows European bailout funds to inject money directly into troubled banks without their home countries co-signing, allows investors in the third quarter to focus on:

•The mixed performance so far this year. While the S&P 500 index is up 8.3% this year, that masks what's been quite the drama. The first quarter started with gusto, notching an impressive 12% gain. But stocks lost their mojo in the second quarter, falling 3.3% as investors worried about Europe, a slowdown in China and whether the U.S. could withstand the shock. Given uncertainty about the U.S. election, it wouldn't be surprising to see similar turbulence in the third quarter, says Peter Cardillo of Rockwell Global Capital.

•What's next globally. To keep the market rising, Europe must take the politically unpopular move to print money to bail out Spain and Italy, RiverFront's Jones says. Meanwhile, China needs to aggressively stimulate its economy. If both things happen in the third quarter, "it's off to the races," he says. But if it takes until the fourth quarter for policymakers to make those moves, the market may trade sideways until the end of the year, he says.

•Any confidence from investors or companies. While stocks have been rebounding, that alone isn't enough to draw money back into the market, says Robert Maltbie of Singular Research. When merger and acquisition picks up, it's a sign companies think current stock prices are attractive. But buyouts involving U.S. companies totaled just $376 billion the first half of 2012, the lowest first half since 2003, Dealogic says.

That's why Maltbie thinks the next three months might be more like the second quarter than the first. "It's ho-hum city," he says.