S&P 500 posts best first quarter in 21 years

Investors are back in a buying mood, pushing the S&P 500 to its best first quarter in 21 years after what was a rocky end to 2018.

The benchmark, the broadest measure of large-capitalization stocks, rose 13 percent, just shy of the gains reached in 1998, as tracked by Dow Jones Market Data Group.

“A big start to the year historically has suggested the bulls could remain in charge the rest of the year,” said LPL Senior Market Strategist Ryan Detrick in a note. He added that “9 of the past 10 times the S&P 500 was up at least 10% during the first quarter, the rest of the year was also in the green.”

Another bullish stat for some is how broad the rally was. All 11 sectors in the S&P clocked gains of at least 5 percent, led by tech, real estate and industrials. Even the worst performing sector - healthcare - rose 6 percent. While Tom Lee, Fundstrat Global Advisors Co-Founder, tells FOX Business that investors were “too bearish late last year.” He sees more gains ahead in stocks for 2019 with the S&P hitting the 3,000 level.

The quarter also ended at what may be the start of an IPO boom. Lyft, the smaller ride-sharing company behind Uber, staged a successful IPO, valuing the company north of $20 billion and possibly paving the way for other high profile deals such as Uber, Slack and Pinterest.

Ticker Security Last Change Change %
LYFT LYFT INC. 15.54 -0.15 -0.96%

The Dow Jones Industrial Average rallied 11 percent led by General Electric, Facebook and Cisco, while the Nasdaq Composite rose 16 percent helped by chip maker Xilinx, Celgene, which is being acquired for $74 billion by Bristol-Myers and Bed Bath and Beyond, which is now the target of three activist firms trying oust the retailer’s CEO and entire board.

Ticker Security Last Change Change %
GE GENERAL ELECTRIC CO. 155.70 +0.08 +0.05%
FB n.a. n.a. n.a. n.a.
CSCO CISCO SYSTEMS INC. 48.36 +0.30 +0.62%
XLNX n.a. n.a. n.a. n.a.
CELG n.a. n.a. n.a. n.a.
BBBY n.a. n.a. n.a. n.a.

The gains in U.S. stocks came amid some uneven economic data, including a soft employment report for February in which employers added just 20,000 jobs. Additionally, the U.S. and China have yet to reach a trade deal, although talks are ongoing.

During the quarter, the Federal Reserve also softened its hawkish stance, signaling the potential for few to no rate hikes in 2019. “The Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes,” the Fed said in a statement released following the two-day March meeting.


And in a new twist, the Fed is being called upon to cut interest rates. Top White House economic adviser Larry Kudlow suggested on Friday to Axios that the Fed should cut rates “immediately.” He shares the same view as conservative economist Stephen Moore, Trump’s newest pick to join the world’s most powerful central bank.

If approved, Moore would be working closely with Fed Chair Jerome Powell, who has been on the receiving end of frequent attacks and criticism from President Trump as policymakers were forecasting future rate hikes.

Suzanne O'Halloran is Managing Editor of FOXBusiness.com and is a graduate of Boston College. Follow her on Twitter @suzohalloran