S&P 500 round trip: What lies beneath


Today's early rally brings the S&P 500 index a step closer to the March 24, 2000 record closing high of 1527.36. Despite all the hoopla, it's worth keeping in mind that the benchmark measure is essentially unchanged over the course of the past seven years.

Still, the round trip from the bubble's peak does mask a dramatic contrast in the fortunes of the index's 10 underlying sectors. For example, energy shares (which have an equivalent exchange-traded fund, or ETF (AMEX: XLE)) have more than doubled over the period, while the information technology group (AMEX: XLK) has lost nearly two-thirds of its value.

This should drive home the point that while moves in the major indices offer insights on the "pulse" of the overall market, it's often what occurs below the surface -- at the sector and individual share level -- that matters most to investors in the longer run.

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle: An Insider's Guide to Successful Investing in a Changing World.

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Symbol Lookup
IndexesChangePrice
DJIA-89.2312,801.23
NASDAQ-23.352,903.88
S&P 500-9.311,342.64

Last updated: February 12, 2012: 10:12 PM

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