The only thing flatter than the S&P 500 returns during December were the overall returns for the index for the full year of 2011. The major benchmark for U.S. equities finished December with only a 0.85% change to the upside while for the year the index finished only 4 hundredths of a point lower than the 2010 close. Dividends included, the total return for the S&P 500 for 2011 came in at a measly 2.11%.
To get a better idea of what comprises that 2.11% return, below are the annual returns for each sector:
|Sector Name||December Return||2011 Return|
|Healthcare||+ 3.61%||+ 15.42%|
|Consumer Defensive||+ 1.69%||+ 11.42%|
|Utilities||- 0.24%||+ 5.59%|
|Energy||- 0.68%||+ 3.75%|
|Communication Services||- 0.31%||+ 3.74%|
|Technology||- 1.71%||+ 1.71%|
|Real Estate||+ 2.43%||+ 1.54%|
|Consumer Cyclical||- 1.25%||+ 0.76%|
|Industrials||- 0.21%||- 2.55%|
|Financial Services||- 0.20%||- 14.37%|
|Basic Materials||- 4.22%||- 16.36%|
Believe it or not there was a sector worse than the financials as basic material stocks surpassed the losses of financials by almost 2%. On the other side of the coin, 2011 saw Healthcare as the strongest performing sector which reversed course after having a greatly underperforming 2010. The sector likely benefited as focus within the government shifted from healthcare reform to financial reform.
Looking forward to 2012, I am looking for the Utilities, Real Estate and Industrials sectors to lead U.S. equities higher. I believe the positive signs shown by the housing economic indicators towards the end of the year will be the first in a series of signals letting investors know growth will return in 2012.