While the stock market has barely budged this year—the Standard & Poor’s 500-stock index has gained 1.6 percent—since March its complexion has changed. Last year’s stars are fading and former laggards are taking the lead, leaving professional money managers scratching their heads.
Three stodgy groups performed strongly from March 1 through May 9, while Internet stocks plunged.
Stocks that investors snapped up last year on expectations of rapid earnings growth became losers in March, April, and early May.
The shift caught mutual fund managers off guard, yet poor performance hasn’t deterred investors so far.
What the pros did
Analysts, short sellers, and institutional money managers backed the wrong stocks from March 1 through May 9.