By Karagosian Financial January was not a very auspicious start to 2015 as all major U.S. indices began the year with declines. However, in February the market rebounded and the first quarter ended in positive territory for two out of three of the major stock indices. The minimal gain of 0.44% for the S&P 500 Index last quarter made it the ninth consecutive quarterly gain in this widely followed index.
This index had only three other stretches that long since World War II. Among the other familiar indices, the Nasdaq gained 3.48% and the Dow Jones Industrial average lost 0.26% year to date. The market may be anticipating weakened earnings growth for many companies in the first quarter.
After the aggregate S&P 500 Index companies reported mid-single digit earnings growth for the fourth quarter of 2014, current estimates call for a year over year decline of 2% for the first quarter of 2015. This is primarily due to large double digit percentage declines anticipated for the energy sector's earnings. If energy is excluded, a 5% gain in the first quarter is predicted for the remaining companies in the index.
This is still positive but not up to previous levels of growth. The stronger dollar has been given as reason for lower growth in many instances, as almost half of the revenue for companies in the S&P 500 is derived overseas. Health-care stocks were again among the top performing sector last quarter. So far the industry's fear of mandatory health insurance has in reality worked to their benefit.
Consumer discretionary stocks also outperformed the broader market. Utility stocks were the biggest laggard in the first quarter after posting a big year in 2014.