It's been a reversal of fortunes for banks in 2012: financial stocks lead this year, up 26 percent, after performing the worst of all 10 S&P 500 sectors last year.
Consumer discretionary names are set to finish 2012 with strong gains as well, mainly due to the rally in home builders, home improvement stocks, and retailers. The iShares Dow Jones U.S. Home Construction ETF trades near four-year highs, up 74 percent this year, as housing has been the economic bright spot of 2012.
Home Depot, a darling of 2011, remains on top, posting the second biggest annual gain on the Dow Jones Industrial Average, up 44 percent, behind Bank of America, which is up more than 100 percent. The do-it-yourself home improvement retailer benefited from both the housing recovery and super storm Sandy, which pummeled the East Coast at the end of October.
Airlines are another turnaround story. The NYSE Airline Index is up 35 percent in 2012, after skidding 31 percent in 2011. The index has soared to a one-and-a-half-year high on stronger booking trends, lower jet fuel prices, and industry consolidation.
It's not so rosy for utilities, nor Meg Whitman's battered hardware company Hewlett-Packard, though. Utilities sank from best to worst among the 10 S&P 500 sectors in the past year. The sector took a nosedive after Sandy wreaked havoc on the Northeast. Utilities had been higher for the year before tumbling eight percent amid the aftermath of power outages that swept across Manhattan and New Jersey.
HPQ, a Dog of 2011, can't seem to catch a break. The computer hardware stock fell for a third straight year, despite annual gains from peers Seagate Technology and Western Digital. HPQ is the worst performer on the Dow, down 45 percent. The stock has shed 73 percent over the past three years.