NEW YORK — Stocks ended March on an upbeat note, posting their best monthly gains in more than six years and one of the top 20 months since 1950, a good omen for the market a year from now, if history is any guide.
“If it does end up being one of the top 20 months, prior history shows that future market performance the following month and within the following year tends to be positive,” said Dan Greenhaus, market strategist at Miller Tabak.
On Tuesday, the Dow Jones industrial average gained 86.90 points, or 1.2 percent, to end at 7,608.92, while the Nasdaq Composite rose 26.79 points, or 1.8 percent, to end at 1,528.59.
The Standard & Poor’s 500 index, which most investing professionals use as a benchmark for the broad market, was up 10.34 points, or 1.3 percent, at 797.87 Tuesday, giving it an 8.54 percent advance for March. That’s its best monthly gain since an 8.64 percent rise in October 2002.
For March, the Dow was up 7.7 percent and the Nasdaq rose 10.9 percent. But for the first quarter, the Dow was down 13.3 percent, the S&P down 11.7 percent and the Nasdaq down 3.1 percent.
Still, for the S&P 500, this month’s gain ranks as the 17th-largest since 1950.
Greenhaus looked at the 20 largest monthly increases since 1950. In the month following those gains, the market tended to rise an average of 0.96 percent. Within a year, it had gained an average of 11.79 percent.
Averages, of course, tend to iron out inconvenient details that can make the whole difference.
“Past performance doesn’t guarantee future performance,” Miller Tabak’s Greenhaus said. “We’re dealing with such a gigantic shift on so many fronts — from consumer sentiment to the ability of financial firms to make money to the economic front — that it’s hard to assess the future.”
