The market and its sectors have rallied nicely off their bottoms, several to new highs. With earnings season here, the sectors that are stalling (telecom, energy, and industrials most notably) will probably not see more growth throughout the quarter (unless of course the stocks blow away their numbers).
Investors should be wary of third quarter earnings. We have already seen warnings from CVX, VLO, IP and misses by AA and MON. The table below shows the contribution that each of the top 10 gainers have made to the S&P's 138.61 point gain. 24% of the total gain since 8/15 have come from 2% of the S&P 500 members. While Goldman Sachs (GS) has been bouyed dramatically by its earnings, reports from the remaining companies will likely determine where the market goes through the end of the year.