Losers became winners in a crazy month for stock market
— -- While Hollywood is famous for surprise endings, Wall Street in March delivered what the bulls hope will turn out to be a surprise beginning.
Just as investors practically wrote off financial and materials stocks coming into 2009, those were precisely the two best performers in March of all 10 industry sectors, Standard & Poor's says.
Meanwhile, the normally safe industry groups investors rushed into for cover, utilities and consumer staples, were the worst performers in March.
Those are just two of the biggest twists the stock market delivered — on top of the unexpected 8.5% March surge in the Standard & Poor's 500 index.
And now, investors are hopeful trends emerging from the individual sectors, pointing to a more bullish future, are providing additional evidence the market's recent rally might hold. A few of the sector moves catching investors' attention include:
•Improvement by sectors closely tied to the economy's health. All 10 sectors in the S&P 500 gained in March. But, financials, information technology and consumer discretionary stocks landed in the top four. These sectors, historically, lead in the first year of a bull market, S&P's Sam Stovall says.
•Strength of technology. Tech stocks were top performers in March, up 12.1%. More important, tech is the only sector up, by 4.0%, for the first quarter. Tech companies have become the new haven, says John Schloegel, portfolio manager at Capital Cities Asset Management, because of their low debt loads and high cash piles. Meanwhile, owning tech stocks means investors won't miss out on a market recovery if it lasts, he says.
•Bounce back of consumer discretionary stocks. Earlier this year and late last year, when investors were bracing for financial catastrophe, companies selling things that consumers could put off buying until later took a beating. But now, investors are moving back into the so-called consumer discretionary sector, showing a bit more faith that consumers might loosen up spending.
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