The S&P 500 Index recorded its best first six months of a year in the past 15 years, as stocks in the U.S. closed a strong first half of 2013, despite suffering losses in June driven by investor worry of monetary tightening by the Federal Reserve Bank.
The slow but sure economic recovery accounted for average gains by investors for the first six months of 12%. Those gains were helped by the central bank’s money policy, but also were underpinned by strong profits from business.
New records for the Dow Jones and S&P have confirmed the recovery, at least in the stock market, from the financial crisis that gripped the country in 2008.
Small investors returning to the market also has fed an increase in IPOs, acquisitions and mergers, as Wall Street is getting back to its pre-crisis days.
U.S. stocks became the best performer in the world among the major financial markets, while Europe continued to sag and emerging markets fell by close to 11%.
The S&P 500, which is the broadest measure of stocks in the U.S., added 12.6% between January and June, the strongest January to June performance in 15 years.
The blue chips on the Dow were even more impressive as they rose by 13.8%, their biggest increase in the past 14 years. The technology rich Nasdaq was up 12.7% for the same period.
The gains were strong despite the losses suffered by the index of over 3% during June, as the future of quantitative easing by the Fed came into question with bond yields jumping amidst expectations that interest rates would increase.
June however, will be looked at as a turning point in sentiment in the market, with investors being more cautious and focusing on both earnings and monetary policy, rather than just the momentum of money.
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