For stocks, a stable and impressive climb in 2012
NEW YORK — The bulls weren’t bullish enough.
The stock market just had its best first quarter in 14 years. The surge has sent Wall Street analysts, some of whose forecasts seemed too sunny three months ago, scrambling to raise their estimates for the year.
“That it’s up isn’t surprising. It’s the magnitude,” said Robert Doll, the chief equity investment manager at BlackRock, the world’s biggest money manager.
Doll said stocks could rise 10 percent more before the end of the year. That would be enough to push the Dow Jones industrial average to an all-time high and the Standard & Poor’s 500 close to a record.
For the first three months of the year the Dow is up 8 percent and the S&P 12 percent, in each case the best start since the great bull market of the 1990s. The Nasdaq composite index, made up of technology stocks, has had an even more remarkable run — up 19 percent for the year.
“I don’t think anyone could have predicted this,” said Chip Cobb, a senior vice president at Bryn Mawr Trust Asset Management. For these gains, he said, “I thought it would take all year.”
The jump gives money managers like Cobb hope that ordinary folks burned by two deep bear markets in a decade will start buying again, propelling the indexes even higher.
In a remarkable act of self-restraint — or foolishness, depending on your view — they have mostly stayed out of the market. One reason they may jump in now is that fear of looming disasters, like a full-blown debt crisis in Europe or another U.S. recession, has faded.
Bulls say investors will turn their attention to the only thing that really matters for stock prices in the long run, corporate profits. Another hopeful sign for gains is that those who have been buying stocks appear to be taking bigger risks than before, suggesting growing confidence.
Last year, investors put much of their money into so-called defensive stocks, such as utilities and health care companies, which make money in bad times as well as good. This year, it’s the risky fare that’s being scooped up.