Member FINRA/SIPCPage 1 o 3
Jeffrey Kleintop, CFA
Chief Market StrategistLPL Financial
LPL FINANCIAL RESEARCH
Weekly Market Commentary
March 11, 2013
Dow: The Great and Powerful
The Dow Jones Industrial Average poweredits way to a new all-time high last week — ouryears ater the low point on March 6, 2009.The good news is that since WWII, only twoo the six bull markets that made it to theirourth anniversary ailed to make it to a fth.But the bad news is that we may need amodest pullback to sustain this bull market.Rather than signal a sign o weakness, pullbacksare oten the pauses that reresh the bull market.
Oz: The Great and Powerful
, the prequel to
The Wizard of Oz
,premiered last week. The story o how the wonderul wizard overcame therisks and prevailed worked its magic on moviegoers and proved popular witha strong box ofce showing. In the same week, the Dow Jones IndustrialAverage (Dow) proved popular with investors as it powered its way to a newall-time high, as it overcame many risks to reach the ourth anniversary othe start o the current bull market rom the low point on March 6, 2009.The Dow stands 115% higher than it did our years ago. However, i we donot disregard the stocks behind the curtain o the great and powerul Dow,we see that this time the index no longer holds the stocks o AIG, Citigroup,and General Motors (among others) as it did at the prior peak on October 9,2007. The many changes to the 30 companies that make up the Dow makeit worthwhile to take a look at the stock market defned by broader indexeslike the NASDAQ and S&P 500.
On the 13th anniversary o the peak in the NASDAQ, this tech-heavy indexis still more than 35% away rom the peak reached on March 10, 2000.Nevertheless, this index has outperormed the Dow with a gain o 149%over the past our years.
The broadly diversifed S&P 500 Index is also outpacing the Dow witha gain o 125% since its March 2009 low and experiencing the second-best our-year bull market in history, second only to the bull that began onAugust 12, 1982[Figure 1].
01 Year2 Years3 Years4 Years16012080400S&P 500 Index Performance During All Bull Markets Since WWII06/13/4906/27/6210/07/6605/26/7010/03/7410/22/5708/12/8210/11/9003/11/0303/09/0912/04/87
This Is the Second-Best Four-Year Rally Ever
Source: Bloomberg data, LPL Financial 03/09/13The S&P 500 Index is an unmanaged index and cannot be invested into directly. Past perormance is no guaranteeo uture results.
The Dow stands 115% higher thanit did our years ago.