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Second Quarter 2011 Market Recap |
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(For the quarter ended June 30, 2011.)
A string of winning days at the end of June helped the stock market wrap up a volatile second quarter essentially where it began, as investors continued to fret about U.S. and world economies. While mixed corporate earnings reports, a potential federal government shutdown, overseas economic uncertainty, and a series of weaker-than-expected economic reports shook confidence in equities at times, Treasuries generally rallied. The Dow Jones Industrial Average was up just 0.77% overall from April through June, while the S&P 500 posted a quarterly return of -0.39%, and the Nasdaq returned -0.27%. Strong corporate earnings reports helped U.S. equity prices rise in April despite early setbacks caused by worries about the federal budget, the European sovereign debt crisis, and disappointing jobless numbers. Later in the quarter, several economic reports raised fears that a full-scale recovery is not yet imminent. For example, housing data remained disappointing and Federal Reserve Chairman Bernanke commented that the economic rebound is "frustratingly slow." The quarter ended on a high note, with stock prices rising after German banks said they would support Greece's economy, forestalling the threat of a Greek debt default.
| Through 6/30/11* |
Quarter |
1-Year |
3-Year |
5-Year |
Closing Value |
| S&P 500 |
-0.39% |
28.1% |
1.0% |
0.8% |
1,320.64 |
| Dow Jones Industrials |
0.77% |
27.0% |
3.0% |
2.2% |
12,414.34 |
| Nasdaq Composite |
-0.27% |
31.5% |
6.5% |
5.0% |
2,773.52 |
Source: Standard & Poor's. The S&P 500, Dow Jones Industrials, and Nasdaq Composite are unmanaged indexes. It is not possible to invest directly in an index. Past performance is no guarantee of future results.
*Price only. Does not include
All eyes on Greece: Much of the quarter's anxiety stemmed from Europe's sovereign-debt crisis in general, and the threat of a Greek default in particular. But German banks agreed to support a new aid program for Greece, and Greek lawmakers passed an unpopular austerity plan designed to help the government regain more solid financial footing, helping investors regain confidence.
Yields in perspective: The 10-year Treasury yield fell during the quarter, to 3.17% from 3.43% at the beginning of April. It had dropped to 2.85% on June 21, a low for the year, but rose again late in the quarter as the stock market's rebound lured investors away from less-risky assets.
Oil lower: The price of oil fell from more than $100/barrel at the beginning of the quarter, to approximately $95/barrel on June 30. Prices had dropped lower in June after the International Energy Agency agreed to release 60 million barrels from strategic reserves, but moved up again within a week of that announcement.
Fed in focus: Investors were left feeling uneasy following the June 21-22 meeting of the Federal Open Market Committee (FOMC). Chairman Ben Bernanke stated that the Fed itself finds the slowdown puzzling and that parts of it may last longer than expected. The Fed cut its GDP growth estimates for 2011 to 2.5%-3.0%, from the 2.9%-3.7% forecast in April. It revised its estimate for 2012 GDP growth down sharply, to 2.2%-4.0% from the 2.9%-4.4% forecast in April. It also upwardly revised its unemployment rate and pricing forecasts for 2011 and 2012.
© 2011 Standard & Poor's Financial Communications. All rights reserved.
© 2011, Kelly Ruggles, Spokane, WA. Web site
Kelly C. Ruggles, Spokane, WA. is a fee-based financial planner located in Spokane.
Kelly C. Ruggles, Spokane, WA. President of American Reliance Group, Inc., a registered investment advisor.
Kelly Ruggles, Spokane, WA. is the author of "The Financial Playbook" for Retirement
Kelly C. Ruggles, Spokane, WA. Does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions.
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