Is the S&P 500 Bringing Back Positive Performance?

Despite a weaker final month and day, the Standard & Poor’s 500, along with the other major stock indexes, closed with a gain for the second quarter. This may not have been the biggest event for the Dow Jones Industrial average or Nasdaq, but it was an event for the S&P 500.

June marked a couple of special occasions for the the S&P 500. Firstly, it was the first time in four years that the index closed its second quarter positively. June may have hurt by concerns that the Federal Reserve’s so-called “quantitative easing” program would come to a sudden end — as Fed Chairman Ben Bernanke suggested — but the quarter as a whole managed to remain positive.

MLV & Co.’s head of capital markets, Randy Billhardt, said of the second quarter, “I think the momentum that was established at the end of the first quarter kind of gave us a phenomenal start.” Adding that “the low interest-rate environment has really been the foundation of the stock market performance for this second quarter.”

The close of the second quarter also marked the index’s strongest first half in more than a decade. The S&P 500 reached record highs in mid-May which helped to boost the overall positivity of the first half, bringing it to its highest level since 1998. The index’s peak for the past fifty-two weeks was $1687.17.

The S&P 500 wasn’t alone in the quarterly gains. The Dow gained 2.3 percent in the second quarter, just below the S&P 500′s 2.4-percent gain. The Nasdaq came out strong with a 4.2-percent jump up in the quarter. If it wasn’t for June, all three indexes might have ended the quarter even stronger.

June broke positive streaks for all three indexes — seven-month streaks for the S&P 500 and Nasdaq, and a six-month streak for the Dow. The Dow fell 1.4 percent over the course of June. The S&P 500 and Nasdaq both dropped 1.5 percent in June.

The Fed’s $85 billion monthly economic stimulus in the form of bond purchases may have set the stage for the gains of the indexes, but it also created concerns that might produce negativity going into the second half of the year, as was seen in June.

Trading volume on the S&P 500 was at its second highest level for the year on Friday. Around 10 billion shares were exchanged over the course of the day, with almost half of those moving in just the last 30 minutes of trading. If the shaky and anxious trading continues into July and the second half of the year, the S&P 500′s gains could quickly be forgotten.

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