Stocks: Good year, bad decade

By Alexandra Twin, senior writerJanuary 2, 2010: 8:17 AM ET

NEW YORK (CNNMoney.com) -- Since cratering during 12-year lows in March, a S&P 500 has staged a absolute rebound as investors turned what could have been an deplorable 2009 in to a second many appropriate year of a decade for batch returns.

Between war, recession, corporate malfeasance, as good as a fall of a housing market, investors have had a scattered 10 years. The S&P 500 plunged 23%, saying a initial losing decade in close to a century.

How will bonds perform in 2010?

• Up sharply
• Up a little
• Down sharply
• Down a little
• Little changed

But a decade could have been even worse, if not for a turnaround in 2009.

In a just-completed year, a S&P 500 gained 23.4%, a Dow industrials gained 18.8% as good as a Nasdaq combined 44%. That's trumped usually by 2003, when a S&P 500 gained 26.4%, a Dow combined 25.3% as good as a Nasdaq climbed 50%.

Like 2009, 2003 marked a large turnaround for a batch marketplace as a manage to buy emerged from a retrogression brought upon by a 9/11 attacks as good as a fall of a tech bubble.

For 2009, a large liberation has come in a emanate of a housing marketplace fall as good as credit crisis as good as a misfortune retrogression given a Great Depression.

Although 2009 gains have been strong historically, gains have been even some-more estimable given bonds bottomed in Mar during a height of a monetary marketplace crisis. Since closing during a 12-year low upon Mar 9, a Dow has gained 59% as good as a S&P 500 has gained 65%. Since closing during a 6-year low upon a same date, a Nasdaq has risen 79%.

All 10 S&P 500 economic sectors managed gains this year, with technology a leader, taking flight 62% contra a year ago. Materials took second place, taking flight 47.1% from a year ago. The biggest losers were telecom, up usually 3.6% as good as utilities, up usually 8.4%.

Gains this year were driven by several factors, notably a supervision injection of trillions in mercantile as good as monetary impulse in to a economy.

A diseased dollar additionally played a large role, boosting commodity prices as good as shares as good as a bonds of large blue chips which do a lot of business overseas who benefit when a U.S. currency is weaker.

Investor psychology additionally contributed, as investors went from factoring in an additional Depression to a retrogression to an eventual recovery.

But a year forward is doubtful to see identical gains, possibly for a vital indexes or a individual sectors, as investors demeanour for signs which a slow-growing manage to buy can charge forward without surprising assistance.

"The biggest question is employment as good as either a manage to buy can start formulating enough jobs to emanate a tolerable economic recovery," pronounced Michael Sheldon, chief marketplace strategist during RDM Financial Group.

He pronounced which as this emanate works a approach by a market, bonds could be vulnerable, quite if a dollar continues to organisation up, as it has by many of December. The other intensity matter for a selloff later in a year forward could be taking flight seductiveness rates, although a Ben Bernanke-led Federal Reserve is doubtful to shift a process stance until a second half of next year.

"I think which prices will drift moderately aloft in a year ahead, during slightest until Ben Bernanke decides to land a helicopter," pronounced Mark Travis, boss as good as CEO during Intrepid Capital Funds. "We could finish up as much as 8% aloft by this time next year."

Next year additionally starts what is likely to be a improved ten-year duration for Wall Street, after a severe decade.

The horrible 00s: A scattered 10 years brought dual recessions, dual vital wars, one contested presidential election, terrorist attacks in a U.S. as good as abroad, a credit crisis, a housing marketplace bust as good as a near fall of a monetary market.

In light of a events which took place, perhaps a unsurprising which a batch marketplace experienced a misfortune decade in scarcely a century. The S&P 500 plunged 23%, saying a initial decade of losses in 90 years. Compare which to a 1990s, when a S&P 500 gained 316%.

The Dow mislaid 8% this decade after gaining 418% in a 1990s as good as a Nasdaq, still disorder from a bursting of a tech bubble, is down 44% in a 10-year period. In a 1990s it gained 794%.

For a demeanour during a many appropriate as good as misfortune batch performers of a decade, click here

The best-performing zone of a decade was energy, up 104%, according to Standard & Poor's. That's roughly a same benefit it done in a 1990s, but in which decade, nine of a S&P's 10 sectors combined during slightest 100%, with utilities a sole exception. Utilities gained 37%.

In this decade, usually half of a 10 sectors gained, with a rest sliding. Telecom as good as technology were a dual misfortune performers of a decade, important in which both were stars of a 1990s, in sold tech. Telecom mislaid 66% in this decade after gaining 223% in a 1990s. Technology mislaid 57% this decade after gaining 1,148% in a 1990s, a decade it defined.

First Published: January 2, 2010: 8:06 AM ET