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Sector Dogs Bark Loudest

Friday, 1 May 2009 | 7:38 AM ET

After posting dismal losses from September through February, the markets closed out April with their second straight month of impressive gains. In fact, the S&P 500 posted its best 2-month gain since 1975, while the Dow Industrials had its best 2-month showing since 2002.

April Last 2 Months
Dow Industrials +7.35% +15.65%
Dow Transports +17.14% +25.81%
S&P 500 +9.39% +18.74%
Nasdaq Composite +12.35% +24.64%
Russell 2000 +15.33% +25.33%

Some of those April gains are impressive too. The S&P 500 ended April with its best month since March 2000, while the Dow Transports had its best month since January 1991. Additionally, the small cap Russell 2000 index had its 2nd best month ever, posting its biggest monthly rally since February 2000.

But what’s the common theme in April’s performance? The worst-performing indices and sectors over the first 2+ months of the year were also the top performers in April.

For instance, while the major indices were down anywhere between 20% and 40% on the year as they hit their lows back in March, the Dow Transports (down 40%) and the Russell 2000 (down 31%) were the notable underperformers. However, as shown above, those two indices were the best-performing indices in April.

This also holds true with the S&P 500’s ten sectors (note the performance of financials, industrials and consumer discretionary sectors):

YTD as of Markets’
This Month March 6 Low
Financials +22.17% -53.51%
Consumer Discretionary +18.53% -26.59%
Industrials +17.72% -37.04%
Materials +15.09% -22.11%
Techs +12.04% -13.60%
Energy +4.81% -22.59%
Consumer Staples +3.04% -19.05%
Telecom +2.23% -20.61%
Utilities +0.42% -23.02%
Healthcare -0.89% -18.96%

So after two months of nice gains, one question remains: Can the markets string together three straight months of gains, or will investors “sell in May and go away?”

Comments? Send them to bythenumbers@cnbc.com

bythenumbers.cnbc.com

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