Market Commentary

It was one year ago this week that the Standard & Poor's 500 closed at its bear market nadir of 676 on March 9, 2009. Last week, it closed at 1138, which represents a gain of 68% from the year ago low. What insights can we learn from the painful decline to 676 and the rapid rise to 1138? We have a few, but before we get to them, here's the market box score.

Three months ago, on December 1, 2009, the S&P 500 closed at 1,108. Last week it closed at 1,104. After three months, the net movement in the stock market was just 4 points. Hmm. What does that tell us about investing? Here are a few thoughts that come to mind.

The U.S. stock market has had several "mini corrections" since the March 9, 2009 low and last week's strong performance has some analysts saying the recent 9% drop in the S&P 500 from its mid-January high may have run its course, according to the Associated Press.

The Reuters/University of Michigan consumer sentiment preliminary index for February that was reported last week declined slightly from the late January number and it was lower than expected as consumers continued to fret over unemployment.

Volatility in the financial markets has risen noticeably in the past few weeks as investors remain on edge about a multitude of issues.

Let’s recap some of the good news last week:

§         The Commerce Department said the economy grew in the fourth quarter at its fastest pace in more than six years;

Sometimes earnings move the markets. Sometimes politics does the trick. Last week, both were in play and the result was not pretty.

Former Federal Reserve Chairman Paul Volker was back in the news last week as he warned that the financial system needs broad reform or else we run the risk of another financial crisis.

It seems hard to believe that it was 10 years ago that we entered the new millennium. The world has certainly changed over that time.