Growth SpurtRosanne Pane, a mutual fund strategist at Standard & Poor's, says growth funds would have outperformed value for the entire first quarter of 2004, but their momentum was interrupted in February and March after consumer confidence numbers started to fall and investors became cautious about both the strength of the economic recovery and the longevity of the stock market rally. For the full first quarter of 2004, S&P reported that large-cap value funds outpaced large-cap growth ones 2.51% to 1.36%, while the S&P 500 gained 1.51%. Morningstar's quarterly results came in slightly different, with large-cap value returning 2.37% and large-cap growth returning 1.4%. Over the past four weeks, however, Pane says investors have recovered from their late winter crisis of confidence, particularly with the surge in March nonfarm payrolls. "Standard & Poor's believes that growth will reassert itself when first-quarter earnings come out, and currently recommends that investors overweight information technology, health care and consumer discretionary," says Pane.
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