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Home>What rose in the third quarter? Stocks, bonds--basically everything

What rose in the third quarter? Stocks, bonds--basically everything

What rose in the third quarter? Stocks, bonds--basically everything

09/30/2017

By Ryan Vlastelica

Consumer staples were the rare S&P 500 sector to fall over the period

Once again, a "set it and forget it" strategy has paid off for investors.

The third quarter was another winner across the economy, with basically all regions, sectors, commodities, and bond categories seeing gains over the period.

For the U.S. stock market, the quarter was merely the latest notch on the bull market's seemingly unstoppable march upward. The S&P 500 has risen for eight straight quarters--meaning the last negative quarter occurred in the third quarter of 2015--and it has risen by nearly a third over that period.

Equities were supported by a number of factors over the quarter, notably a better-than-expected second-quarter earnings season, which supported the idea that fundamentals remained strong in corporate America despite high valuations. Continued improvement in the labor market added to the positive tone, helping to reduce volatility down to nearly nothing, while hopes for a business-friendly tax-reform package passing Congress also boosted sentiment.

The Dow Jones Industrial Average has enjoyed a rally of the same length--up more than 37% over the past eight quarters--while the Nasdaq had its fifth straight quarterly gain. The Russell 2000 index of small-cap shares enjoyed its sixth straight quarterly gain.

Those hoping the good times aren't over do have history on their side. According to LPL Financial, the fourth quarter is historically the strongest of the year. Since 1950, the S&P gains an average of 3.9% over the quarter, and the final three months of the year are positive nearly 80% of the time.

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