Large-Caps Edge Smaller Stocks in Second Quarter

July 08, 2004

Financial services sector is hit hard in Q2.
Large cap stocks slipped past small caps in the second quarter for the first time in five quarters, but the gap between the small cap Russell 2000 Index and the large cap Russell 1000 Index was less than one percentage point, reported Russell Indexes.

'Large caps didn't set off any fireworks this quarter, but at long last they fared better than small caps,' said Dave Hintz, senior manager research analyst at Russell.

Overall, Russell's family of 21 indexes reflected a slightly positive quarter for investors with the broad market Russell 3000 Index inching up 1.3%. The other 20 indexes, which track various market segments, showed relatively little disparity in total performance as the top performing index (Russell Top 200 Growth Index) gained 2.2% while the worst performing index (Russell Small Cap Completeness Value Index) shed just 0.1%. These two indexes totally flipped in fortune from the first quarter which saw the small cap value index (6.9%) gain the most among Russell's indexes.

'The second quarter reminds investors that trends within the market can shift without much fanfare,' said Hintz. 'We saw a shift this quarter from small caps to large caps, and the markets also gave us a change in fortune for the financial services sector.'

Regarding the 12 sectors in Russell indexes, the financial services sector dampened the performance of each index, posting a negative return within every capitalization tier and style. In the Russell 3000, for example, financial services lost 2.3%, ending the quarter as the worst-performing sector and one of only three in negative territory. By contrast, in the first quarter, the financial services sector in the small-cap index gained 7.5%, outperforming the other 11 sectors.

Index
June
2Q04
2004 YTD
1Q04
Russell 3000 Index
1.99
1.33
3.59
2.23
Russell 1000 Index
1.8
1.4
3.33
1.9
Russell 2000 Index
4.21
0.47
6.76
6.26
Russell 2500 Index
3.29
0.34
6.24
5.88
Russell Midcap Index
2.77
1.45
6.67
5.14
Russell Top 200 Index
1.46
1.39
2.18
0.78
Russell 3000 Value Index
2.57
0.88
4.23
3.33
Russell 3000 Growth Index
1.41
1.79
2.96
1.14
Russell 1000 Value Index
2.36
0.88
3.94
3.03
Russell 1000 Growth Index
1.25
1.94
2.74
0.79
Russell 2000 Value Index
5.08
0.85
7.83
6.92
Russell 2000 Growth Index
3.33
0.09
5.68
5.58
Russell 2500 Value Index
3.97
0.51
6.72
6.18
Russell 2500 Growth Index
2.44
0.13
5.65
5.5
Russell Midcap Value Index
3.57
1.73
7.17
5.35
Russell Midcap Growth Index
1.59
1.05
5.94
4.83
Russell Top 200 Value Index
1.8
0.48
2.48
1.99
Russell Top 200 Growth Index
1.18
2.19
1.93
-0.26
Russell Small Cap Completeness Index
2.64
0.1
5.54
5.44
Russell Small Cap Completeness Value Index
3.26
-0.1
5.56
5.66
Russell Small Cap Completeness Growth Index
1.96
0.33
5.54
5.19

Source: Russell Indexes, period ending June 30, 2004 -- all returns %

Sector Index Performance

Sector
Russell 3000
Russell 2000
Russell 1000
Technology
0.83%
-5.93%
-1.40%
Health Care
2.51%
1.70%
2.58%
Consumer Discretionary & Services
-0.16%
0.06%
-0.18%
Consumer Staples
2.81%
1.89%
2.83%
Integrated Oils
8.07%
24.46%
8.06%
Other Energy
10.41%
12.20%
10.04%
Materials & Processing
3.57%
4.09%
3.45%
Producer Durables
5.02%
4.55%
5.10%
Autos & Transportation
9.03%
8.37%
9.13%
Financial Services
-2.29%
-2.65%
-2.26%
Utilities
-1.50%
1.40%
-1.63%
Other
6.82%
9.55%
6.83

Source: Russell Indexes, period ending June 30, 2004

 

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