Actually, stocks aren’t down. That was a trick sentence. At the halfway mark for 2012, stocks are up more than 8 percent.
“People think we’re down because memories are short,” says Rex Macey, chief investment officer at Wilmington Trust Investment Advisors. “It feels like the market’s been worse than it actually has.”
The year began with investors focusing on corporate America’s record profits and scooping up stocks. The Standard & Poor’s 500 index surged 12 percent from January through March.
It looked like that gain might be wiped out in the second quarter. Investors worried about Europe’s inability to find a lasting solution to its debt crisis and about slower job growth in the United States.
Then came Friday: European leaders announced a broad strategy to funnel money into failing banks and keep borrowing costs down for governments, and stocks soared around the world.
It all left the S&P 500 up a healthy 8.3 percent for the year.
What happens next will probably depend on corporate earnings again. For April through June, they are expected to fall 0.7 percent from a year ago, according to S&P Capital IQ, a research firm. That would be the first drop in nearly three years.