Fed's Efforts Propel Financial Stocks to Strong Quarter, 2012
By CME Group - Mon Jan 07 10:43:00 CST 2013 CT
Related Keywords: Equity Index, Market Fundamentals
Fed’s Efforts Propel Financial Stocks to Strong Quarter, 2012

Economic Activity, Employment Expand at Moderate Pace

The Federal Reserve's stimulus efforts provided a boost to U.S. equity markets in 2012, propelling financial companies to the top performance among industry sectors during the fourth quarter and all of last year, according to CME Group analysts.

Financial stocks posted a 6% return during the fourth quarter and a 29% return for the full year, ranking first in both categories among nine S&P Select Sector Indexes, according to CME Group’s quarterly Equity Market Monitor. Technology companies had the weakest fourth-quarter performance, losing about 6%, but still returned almost 16% on the year.

"Domestic equity market action during the fourth quarter 2012 was largely colored by the state of the U.S. economy," CME Group directors John Labuszewski, John Nyhoff and Richard Co. wrote. "The Federal Reserve did a good job in articulating the major economic issues during the quarter."

The Fed’s efforts, including another round of quantitative easing through purchases of mortgage-backed securities, "seem to have exerted some positive impact," they said. The broader S&P 500 Index returned almost 16% in 2012.

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