By STEVE ROTHWELL
NEW YORK (AP) â¿¿ Growth stocks, neglected at the start of the year, are starting to get a bit of love from investors again.
The best returns in the Standard & Poor's 500 index over the past month have been posted by technology companies. Industrial companies as well as banks and insurers are also performing better. By contrast, gains for utilities and consumer staples companies â¿¿ safe-play stocks that had been investor favorites in the first three months of this year â¿¿ have stalled.
It's a change in tone in the rally that has pushed the market to record highs this year. Investors are getting more comfortable owning riskier stocks.The gains for stocks early this year were driven by investors looking for so-called defensive stocks: big companies in steady industries which pay large dividends and aren't as volatile as the overall market. Now, investors are favoring companies that have the best chance of increasing their profits as the economy expands. After a period of subdued growth, investors are more optimistic that the economy is set to revive. If the economy is poised for an upturn, companies whose fortunes are more closely linked to growth should do better. Technology stocks have gained 6.6 percent in the past month, the best performance of all the industry groups that make up the S&P 500. Utilities did the worst, falling 5.7 percent. The index as a whole rose 4.8 percent. Here are some of the reasons behind the shift in investor sentiment: IT'S THE ECONOMY Earlier this month, the government said that unemployment fell to a four-year low as hiring picked up. That was another piece of evidence pointing to better growth. If investors believe that the economy will carry on improving, it makes sense for them to load up on the stocks of companies that will benefit most from accelerating growth.