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Fundranker Blog—Rally Pauses Four Weeks

Rally Pauses Four Weeks

The spring rally we enjoyed has gone on pause the last four weeks. After hitting rally highs during the week ended June 12, 2009, the Nasdaq Composite and Fundranker fell three of the last four weeks, and the S&P 500 fell all four weeks. As of July 10, the Nasdaq Composite (as measured by Fidelity’s Nasdaq Composite Index Fund), the S&P 500 (as measured by Fidelity’s Spartan 500 Index Fund), and Fundranker’s Top Eight Model Portfolio are still up 38.6%, 31.0%, and 20.1%, respectively, for the rally since March 9, but they are down 5.5%, 7.0%, and 9.6%, respectively, since June 12.

Second quarter earnings season is upon us and quickly will tell us if and how much the economy and individual companies are beginning to recover from the recession. Given the past four weeks action in the stock market, investors clearly want to see some improvement before buying into the rally again. Several key companies will report earnings this week: Yum Brands Inc. (owns KFC, Pizza Hut, Taco Bell), IBM Corp., Marriott International Inc., Harley-Davidson Inc., and Bank of America Corp. Earnings reports from these companies will provide investors with penetrating looks at just how much the economy is beginning to recover.

Posted 7/12/09 11:38am ET in Economy, Fundranker, Market