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Quarter-End Insights

Stocks Embark on a Torrid, But Bumpy Run

What's up, what's down, and what's still giving the market fits.

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After plunging nearly 40% in 2008, and opening 2009 with another 25% decline through early March, stocks embarked on a torrid--but bumpy--run near the end of the first quarter. The Morningstar U.S. Market Index pared its losses and was down 10% for the year by March 30.

Reversing the trend of the early part of this decade, the growth indexes outpaced the value indexes, with the Morningstar Large Growth Index down only about 1% for the year through March 30. The Morningstar Small Value Index trailed all other diversified categories with a 21% decline. Investors are according the greatest favor to large businesses with manageable debt levels. Wide-moat stalwart  Coca-Cola (KO) is down just about 2% for the year through March 30, while technology and Internet-related companies such as  Google (GOOG),  Apple (AAPL), and  Qualcomm (QCOM) are up 11%, 22%, and 6%, respectively. The technology firms don't have the steady revenues and earnings of Coke, but they have solid balance sheets. All three have equity/asset ratios of 50% or more, suggesting strong financial health.

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John Coumarianos has a position in the following securities mentioned above: USB, BRK.B, TAREX. Find out about Morningstar’s editorial policies.