The stock market has charged out of the gate in 2006 with a head of steam. The S&P 500, every institution’s favorite benchmark for large cap stocks, is ahead on a price basis by 3.3% through yesterday, January 10. But wait, there’s more: small caps are still hot, as they have been in recent years. The S&P 600’s significantly higher year-to-date rise of 5.3% easily tops the gain for its large-cap brethren a la the S&P 500.
What’s driving equity returns thus far in 2006? The answer rings familiar, to judge by recent history in the performance of the ten sectors that comprise the S&P 500 and S&P 600. In a word, energy is again leading the charge, as it has been for several years now. Indeed, as the two graphs below illustrate, energy stocks are at the head of the performance rankings for both large- and small-cap categories.
