U.S. Stocks Round Out Best Quarter Since the Financial Crisis; S&P 500 Sees Best Start to a Year Since 1998

The Dow and broader U.S. stock market rose on Friday to round out their best quarter since the financial crisis, marking a dramatic role reversal from a tumultuous fourth quarter.

Dow Approaches 26,000

All of Wall Street’s major indexes ended the week on firm footing, with the Dow Jones Industrial Average advancing 211.22 points, or 0.8%, to 25,928.68. Twenty-seven of 30 index members finished in positive territory.

The broad S&P 500 Index of large-cap stocks climbed 0.7% to close at 2,834.41. Nine of 11 primary sectors contributed to the rally, led by a 1.1% gain for health care stocks. Industrials rose 1% and information technology stocks climbed 0.8%.

A strong performance in tech shares propelled the Nasdaq Composite Index to firm gains. The benchmark rose 0.8% to close at 7,729.32.

Best Quarter in a Decade

The majors saw gains of between 11% and 16% during the first quarter, rounding out their best performance since 2009. For the S&P 500 Index, it was the best start to a year since 1998.

The relief rally, which began after Christmas, followed the worst stretch in a decade as the S&P 500 and Nasdaq entered bear-market territory. In markets, a bear market occurs when assets fall 20% or more from their previous peak.

Despite the newfound strength, stocks may soon find themselves on shaky ground once again. According to the latest GDP figures, a synchronized slowdown in the global economy may have finally reached American shores. The U.S. economy expanded just 2.2% annually in the fourth quarter, revised estimates showed on Thursday.

Investors are also gearing up for a potentially volatile earnings quarter. According to FactSet, a financial research firm, S&P 500 companies are likely headed for earnings decline in Q1 2019.

Economic Data Mixed

The U.S. economy showed further signs of slowing in the first quarter, according to the latest personal incomes and outlays report. The Commerce Department reported Friday that U.S. consumer spending rose just 0.1% in January while incomes rose only modestly in February.

In the same report, government economists said the core personal consumption expenditure (PCE) index eased to 1.8% annually in February, down from 2% the previous month. Core PCE is the Federal Reserve’s preferred measure of inflation.

However, the news wasn’t all negative. The University of Michigan’s consumer sentiment index improved to 98.4 in March, a positive sign for consumer spending. Separately, new home sales rose 4.9% in February to a seasonally adjusted 667,000-unit pace, the Commerce Department said.

Featured image courtesy of Shutterstock. Chart via Barchart.com.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi