The four-year bull market has sent the S&P 500 up more than 131% since it reached a 12-year low of 676.53. The rally is extending beyond the average length of bull markets, according to Birinyi Associates Inc. data that show cycles since 1962 have an average duration of four years. Of nine advances, four have lasted longer than the mean and the market rose for about six years during those periods.
“This has been a very broad-based rally in equities, it’s been global,” Stephen Wood, who helps manage about $163 billion as the New York-based chief market strategist for North America at Russell Investments, said by telephone. “Many fundamentals haven’t changed all that much in recent weeks and months, but it’s becoming apparent that momentum and sentiment are changing.”
Shares of retailers, restaurant chains and other companies that depend on discretionary consumer spending jumped more than 233% as a group since the bottom of the bear market to lead gains among the 10 main groups in the S&P 500. Gauges of financial and industrial companies have almost tripled, while technology, commodity and health-care stocks are up more than 100%.
Wyndham Worldwide Corp., CBS Corp., Fifth Third Bancorp and Gannett Co. are among seven companies in the index that have surged more than 1,000% since March 9, 2009.
The rebound in stocks came as the Fed pumped more than $2.3 trillion into the economy through monetary easing since 2008, sending Treasury yields to record lows last year. The S&P 500’s dividend yield, currently at about 2.1%, has been above the rate on 10-year Treasuries for almost a year.
Corporate profits have jumped to a record during the rebound, with earnings-per-share for S&P 500 companies projected to reach $110.51 this year from less than $62 in 2009, according to analyst forecasts compiled by Bloomberg. Alcoa Inc. will unofficially kick off the next reporting season when it posts first-quarter results on April 8.