Now that the second quarter is in the books, we thought we would take a look back at how we arrived at a 1.8% increase in the S&P 500 so far this year. It was indeed a Tale of Two Quarters. For the first quarter of the year, we saw heavy selling nearly across the board, with the S&P 500 falling 11.7%. Information Technology was the only sector to post an increase during the quarter, while financials continued to get hammered (down 29.5%). Investors had yet to see the "green shoots" of spring that we've been hearing so much about lately.
The second quarter, on the other hand, was a completely different story. The strong and broad-based rally that yielded a 15.2% increase in the S&P 500 for the quarter actually started on March 10 following the S&P 500 low on March 9. From the S&P 500 peak on October 9, 2007 to the low on March 9, 2009, the S&P 500 had dropped a stunning 57%. Since that March 9 low, however, the S&P 500 is up over 36%. We now stand about 41% off the high of October 9, 2007.