Market Insights

Stocks just finished their best quarter in a generation, rebounding sharply from the coronavirus pandemic.

The S&P 500 surged 20 percent between its close on March 31 and today. Technology, consumer stocks and energy led the rally as investors hunted for bargains in beaten-down industries. There were also breakouts in software and biotechnology stocks.

It was the S&P 500’s best quarter since the last three months of 1998. In both cases, stocks snapped back sharply from a major fear. Back then, it was the collapse of hedge fund Long-Term Capital Management.

So far in 2020, investors have seen the S&P 500 break out to new highs and then plunge to its lowest level in over three years. They were first scared by business shutdowns, triggering the fastest volatility spike ever. Nerves then calmed as the Federal Reserve and Congress unleashed trillions of dollars to support the economy.

Something else, perhaps more important, has happened along the way: The Nasdaq-100 broke out to new all-time highs.

Can Anything Stop the Nasdaq?

Did you know the Nasdaq-100 is up 30 percent in the last three months? It hasn’t risen that much in a quarter since the end of 2001.

But those times were very different. Back in 2001, the index was still limping from the dotcom crash and the September 11 terrorist attacks. This time, it’s led the entire market thanks to trillion-dollar giants like Apple (AAPL), Microsoft (MSFT) and Amazon.com (AMZN).

The age of Covid has also brought a new set of growth stocks like Zoom Video Communications (ZM), Fastly (FSLY) and Twilio (TWLO). These companies focus on businesses like cloud-computing and e-commerce, which actually benefited from remote working and social distancing.

Two other groups also broke out in the second quarter: biotechnology and gold miners.

The iShares Nasdaq Biotechnolgy ETF (IBB) flew above its previous peak from July 2015. Hopes of a coronavirus vaccine have been a big driver. Investors also view the group as recession proof.

The Market Vectors Gold Miners ETF (GDX) surged above its 2016 peak to its highest level since 2013. Worries about the economy and low interest rates have lifted precious metals.

Biggest Gainers in the Second Quarter

Here are the 10 biggest gainers in the S&P 500 between March 31 and June 30:

1. Apache (APA): The energy company surged 223 percent. It was also the index’s biggest decliner in the first quarter, losing 84 percent of its value.
2. Halliburton (HAL): The oil-services provider bounced 89 percent after dropping 72 percent between December and March.
3. Marathon Oil (MRO): The oil driller rose 85 percent after cratering 75 percent in the first quarter.
4. PayPal (PYPL): The online payments firm rallied 82 percent, breaking out to a new all-time high. It’s gained market share during the the coronavirus shutdown.
5. Gap (GPS): The retailer climbed 79 percent, partly because of its agreement with Kanye West to carry the musician’s Yeezy Gap line.
6. EBay (EBAY): The e-commerce stock rose 74 percent to new record highs. It’s benefited from more demand and platform upgrades.
7. Dish Network (DISH): The satellite-television company rose 73 percent, rebounding from a 44 percent drop in the first quarter. It’s acquiring Boost Mobile and spectrum from T-Mobile US (TMUS).
8. Freeport McMoRan (FCX): The copper producer gained 71 percent as social distancing reduced mine output and lifted metal prices.
9. ViacomCBS (VIAC): The media company rebounded 66 percent after losing about the same amount in the first quarter.
10. Abiomed (ABMD): The heart-device company rose 66 percent after hitting a three-year low in March.