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Fundranker Blog—Spring Rally

Spring Rally

After nine straight weeks of new highs and after weathering the recent deluge of earnings reports, the spring market rally finally took a break during the week ended May 15, 2009. Fundranker’s Top Eight Model Portfolio, the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund) fell 5.65%, 4.87%, and 3.38%, respectively, for the week but still have gained 18.36%, 31.12%, and 32.48%, respectively, since their recent March 9 lows. As of May 15, the Nasdaq Composite is nearly 2% higher than its January 6 high, the S&P 500 is within 5% percent of its January 6 high, and Fundranker is within 10% of its January 6 high.

Despite this week’s setback, has the market turned the corner? The stock market generally begins a sustained recovery several months before it becomes apparent that the economy is recovering from a recession, although it also can stage bear market rallies and still hit new lows if true recovery doesn’t occur. Are tantalizing hints of economic recovery, such as improvements in bank-to-bank short-term lending, pending home sales, construction spending, existing home inventories, and consumer spending holding out real or false hope? Stay tuned to see if this spring rally regains its footing. See our March/April Rally and New Market Rally posts for earlier information on this rally.

Posted 5/17/09 11:59am ET in Economy, Fundranker, Market