By Ken Sweet
NEW YORK -- After two months of trading, the stock market is back where it started.
The Standard & Poor's 500 index rose 4.3% in February, the biggest gain since October 2013, helped by strong corporate earnings and a Federal Reserve that seems to have Wall Street's back at every turn. But the rise in February must be taken in the context that investors spent the month making up the ground they lost in January.
"February looked a lot like January, just moving in the opposite direction," said Scott Clemons, chief investment strategist with Brown Brothers Harriman Wealth Management.
Numbers-wise, the stock market is basically where it was on Jan. 1, but it's a lot more defensive than it was two months ago.
Utilities and health care stocks -- two traditional "safe" places for investors, because of their low volatility and higher-than-average dividends -- are the biggest gainers so far this year. Utilities are up 5.7% in 2014 and health care is up 6.6%.
Investor caution was also evident in the bond market, which has done reasonably well in the last two months. The yield on the benchmark U.S. 10-year Treasury note has fallen from 2.97% to 2.65% in the last two months, as investors returned to the relative safety of government debt. The Barclays U.S. Aggregate bond index, which tracks a broad mix of corporate and government bonds, is up 1.6% this year.
"The sentiment now is, 'Bonds may not be as bad as I originally thought,' " said Michael Fredericks, a portfolio manager of the Multi-Asset Income Fund at Blackrock.