Stocks stumbled in 3Q, as the S&P 500 declined about 3.5% after gaining for three quarters in a row before that. The new bull market remains intact, but is wobbling from labor strife, high interest rates, and a (for now at least) deferred government shutdown. Year-to-date, the broad market index is up about 11.7%. Sector performance shifted in 3Q, as value-oriented groups such as Energy and Financial Services were leaders. The Technology sector dropped 3.0%, but remains up 34% year-to-date. The average stock in the broadly diversified Argus Fundamental Universe of Coverage declined 3.2% during the quarter, and the median stock fell 4.7%. The average BUY-rated stock dipped 2.3%, while the average HOLD-rated stock gave back 5.3%. Here are the 10-best (many from the Energy sector) and five-worst performers from the Argus Universe in 3Q23.

Stocks started a new bull market in 2Q23, as the S&P 500 climbed 20% above bear-market lows from last October. For the quarter, the index climbed about 8%. Performance was narrow in 2Q, led by last year's laggard sectors, including Communication Services, Consumer Discretionary, and Technology. Last year's top-performing sector, Energy, and the Utility sector, were the worst performers in 2Q23. The average stock in the diversified Argus Universe of Coverage rose 4% in the quarter, and the median stock advanced 2%. The average Argus BUY-rated stock rose 5.7%, while the average HOLD-rated stock gained 1.2%. We recently raised our sector rating on Consumer Discretionary to Over-Weight, as the employment environment is strong. We also look for a pick-up in EPS growth in Communication Services and Technology, and expect these groups to pace broad market performance. Below are the top 10 performers from the Argus Universe in 2Q23, many from Technology and Communication Services. After that, we list the bottom five performers.

Stocks were mostly lower on Thursday morning following new inflation and employment data. The Labor Department reported that its producer price index for final demand rose 2.3% year-over-year in April, down from 2.7% growth in March. The core PPI, excluding volatile food, energy and trade services prices, rose 3.4%, also slowing from 3.7% a month earlier. First-time unemployment benefit claims rose by 22,000 to a seasonally adjusted 264,000 for the week ended May 6. The reading was the highest since October 2021 and exceeded the Reuters consensus forecast of 245,000. The Dow fell 0.7%, the S&P fell 0.2%, and the Nasdaq was flat.

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