Stocks & Markets March 4, 2010, 10:28PM EST

A Year After Meltdown's End, a Changed Stock Market

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S&P 500 index: One-year price chart

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So far this year, growth and value are on equal footing. The growth index is up just 0.5% since the beginning of 2010, while the value index has risen 1.5%.

Harder to quantify is a shift toward higher-quality stocks—those with less debt and more cash—and away from the lower-quality stocks that saw large gains after the Mar. 9 low.

Last year, "the [low-quality stocks] that had been trashed the most came back the hardest and fastest," says John Merrill, chief investment officer at Tanglewood Wealth Management. Since then, investing dollars "began to rotate into high-quality assets."

Michael Church, chief executive of Addison Capital Group, notes that prospects for financially strong companies remain bright. "Some of these large-cap international firms are better on a credit basis than many governments," he says.

4. Sector Leadership

Fashions on Wall Street can change quickly, with investors favoring energy stocks one month and financial shares the next.

In 2009, the winner was the technology sector. The S&P 500 Information Technology index was up 59.9% in 2009, 36.5 percentage points better than the S&P 500 overall and 14.7 points better than the next best sector, materials.

In 2010, the clear leader has been industrial stocks. The S&P 500 Industrial Index has gained 5.2% year-to-date, followed by the S&P 500 Consumer Discretionary Index, up 4.5%.

Despite all that has changed, investors' opinion of one sector has remained consistent: The S&P 500 Telecommunication Services index, which includes AT&T (T) and Verizon (VZ), lagged all other sectors in 2009, when it rose just 2.6%. It's also in last place in 2010, down 10% since New Year's.

5. Sentiment

Of all measures of market conditions, investors' moods may have changed the least.

One way to gauge individual investor sentiment is to watch how much money is flowing into or out of stock mutual funds. According to TrimTabs Investment Research, $6.2 billion did move into equity mutual funds in January. That was the first positive inflow, however, since July. (In all of 2009, $31.8 billion flowed out of equity mutual funds.) In February, investors pulled an estimated $7.8 billion out of mutual funds again.

Investors still bear the psychological scars from the past couple years, Hinnenkamp says. "I don't know that people's psyches have moved as far along as the markets and economy have."

The caution and wariness can still be seen in investors who buy safe government and corporate bonds despite extremely low interest rates, says Bill Larkin, fixed-income portfolio manager at Cabot Money Management. On Mar. 4, the yield on a two-year Treasury note was just 0.85%. "A lot of people are still nervous," Larkin says.

Steverman is a reporter for Bloomberg BusinessWeek's Finance channel.