As the stock market continues to trend higher, with the S&P 500 on track for its best first quarter since 1998, industrial and financial stocks are pacing for a strong finish, moving ahead of last year's winners.
Since the beginning of the year, the industrial sector is leading the gains, up 12.9 percent, followed by financial and consumer discretionary companies, rising 11.5 percent and 10.9 percent, respectively.
This quarter, investors have seen a reversal of capital inflows from last year's levels amongst the major S&P 500 sectors. Technology and basic material stocks, for example, which emerged as the leaders in 2009, are now up the least. On the other hand, industrial and financial stocks, which comprised the fourth and sixth spots, are currently leading the way. Note that the since last year, the consumer discretionary sector continues to maintain the third position.
On average, S&P 500 stocks outperformed the overall gains for the NASDAQ 100 components and Dow 30 companies by one and two and a half percent, respectively. So far this year, companies in the S&P index posted an average gain of 8.1 percent, with a median value of 6.5 percent.
Zions Bancorp is on track to close the first quarter of 2010 as the best performing stock, up 70 percent as of Monday's close. Cliff Natural Resources and Smith International, are also at the top of the list, rising 58 and 57 percent, respectively. The worst performing company is H and R block, with a loss of 21 percent; closely followed by Boston Scientific, down 20 percent.
An uptrend has developed in the first three months of this year, with three sectors outpacing the rest of the group, as depicted on the bar chart below. To the downside, telecommunication stocks have seen their largest decrease, with a loss of 4.9 percent, followed by utilities, down 4.2 percent.
Investors seeking opportunities for the second quarter of 2010 may benefit from developing patterns, determining if valuations are now stretched or there is further room to the upside. What follows is an overview of the top performing sectors in the S&P 500, along with a peek at the biggest percent gainers and losers this quarter.