Fridays' rally in stocks capped a turbulent month for the market—especially for its riskier corners, from energy stocks to small companies to biotechnology shares.
After falling 7.4% between Sept. 18 and Oct. 15, the index has snapped back, quickly reclaiming all of that ground and more. The S&P 500 closed Friday at 2018.05, an all-time high. The blue chips aren’t the only assets to have rebounded. Many of hardest hit parts of the market have come back strongly as well.
Here's an overview for the rocky ride that some of the market's more volatile sectors have been through.
From top to bottom, the Russell 2000 index of small-capitalization stocks plunged as much as 11% from its pre-swoon peak of 1179.47. It's recovered much of that since, climbing nearly 12% from its low. Jim Paulsen, chief investment strategist at Wells Capital Management, says the wariness among investors to embrace small shares reflects concerns about the health of the broader economy. "Their weakness re-emerges with the intensifying fears of defleation," he says.
It's a similar story for biotechnology shares, one of the stock market's more white-knuckle bets this year. A popular exchange-traded fund that tracks the sector, the iShares Nasdaq Biotechnology ETF, fell 8.6% from its recent peak in late September. Since then, the fund has surged 17%, and hit a fresh intraday high of 302.98 on Friday.
A once-popular bet on energy companies has also gone south, as a swoon in oil prices threatens to dent the finances of many hot domestic producers, oilfield service companies and drilling firms. Unlike the Russell 2000, however, shares of many energy companies haven't recovered, as oil prices hover near five-year lows.
The exception for the sector has been master-limited partnerships, the storage and pipeline companies that have cropped up around the country in the wake of the boom in U.S. oil and natural-gas production. The Alerian MLP ETF tumbled 10% from mid-September through mid-October. Since then, it has rallied 5.8%.
The Dow Jones Transportation Average shed 11% from mid-September to mid-October. The index has since roared back another 13% and is poised for a new all-time closing high Friday.
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