Large-cap stocks are back in vogue, or so it seems. After producing inferior profit growth for three straight quarters, large-caps outperformed their smaller cousins in the first three months of the year, with year-over-year earnings growth of 13.1% compared with 11.4% for small-cap firms, according to Thomson First Call. Those numbers include actual results for firms that have reported and estimates for the rest. Large-cap stocks also have risen at a slightly faster pace this year compared with small-cap stocks, with the S&P 500 up 5.8% on the year compared with just 4.5% for the S&P 600. Although the difference might seem slight, it is noteworthy considering that the S&P 500 has consistently underperformed its small-cap counterpart over the last three years. "Valuations on some of the big- and mega-cap companies have come down much more than the overall market," said John Waterman, managing director of investments at Rittenhouse Financial, a large-cap growth fund. This multiple compression, along with a big slide in the dollar, has helped large-caps put in a better performance this year, analysts said. A weaker dollar helps large firms, because they tend to do more business overseas and benefit from more favorable currency exchange rates. "Earnings in areas that have held up -- like pharmaceuticals -- are still pretty good, and earnings in areas that fell off a cliff -- like technology -- appear to have bottomed and are starting to improve," Waterman said. The strength of large-cap stocks in 2003 has enabled large-cap mutual funds to produce returns of 4.5% so far, while small-cap funds have recorded a gain of just 3.4%, according to Lipper. In both cases, growth beat value. "As of Jan. 1 this year, there was a rotation from small-cap value into large-cap value," noted Bob Rowe, managing partner at Rowpyn Investment Partners. "We're entering a period of large-cap dominance over the next 12 to 24 months."