NEW YORK (CNN/Money) -
Like a drawn out New Year's Day hangover, the first quarter hit the stock market hard.
The major indexes managed to squeeze the last little bit out of the 2003 rally in the first four weeks of January, and since then have been stumbling, registering seven weeks of see-saw trading, two weeks of steep declines and one of recovery. In the end, the Dow lost about 0.9 percent and the Nasdaq lost nearly 0.5 percent in the first quarter. The S&P 500 was the lone gainer, up about 1.3 percent.
Tech stocks suffered but were not alone in their troubles. The airline sector achieved the dubious honor of being 2004's biggest loser, falling 14.1 percent. Autos have been falling, too. Broadcasting and cable scored the third largest loss for the year so far.
While selling these sectors, investors shifted money into casinos, wireless telecom, oil, homebuilding and even fertilizer stocks.
Many analysts say that until the recovery shows new signs of life and hiring picks up, stocks will be rangebound, even as the market moves into the second quarter.
Here are the first-quarter winners and losers:
1) Airlines, down 14.1 percent. The long-beleaguered industry has seen some signs of recovery lately, but pressures remain. Price wars to gain market share while dealing with soaring fuel costs are hurting the bottom line. United delayed its emergence from bankruptcy and Delta Air Lines warned on its earnings last week. In fact, the S&P 500's second biggest stock loser in the first quarter is Delta Air Lines (DAL: Research, Estimates), down 32.9 percent.
2) Automakers, down 13.5 percent. Although industry analysts and some of the automakers are forecasting stronger 2004 sales, so far the first quarter has been slow. Both General Motors (GM: Research, Estimates) and Ford Motor (FORD: Research, Estimates) reported surprising drops in January U.S. car and truck sales and February sales that edged above January, but missed forecasts. The struggling labor market, weak consumer confidence and tough comparisons to a strong first-quarter a year ago were blamed for the drop. Ford, in particular, has struggled, cutting its first-quarter North American vehicle production and issuing a second-quarter forecast that is lower than a year earlier. Ford is the S&P 500's No. 23 stock loser of 2004, down 15.2 percent.
3) Broadcasting and cable, down 12.1 percent. The sector has fallen with the broader market decline of the last few weeks, as well as in response to increased FCC pressure and fines related to what the regulatory agency considers to be "broadcasts of indecency." Clear Channel (CCU: Research, Estimates) is down 9.6 percent. Viacom (VIA.B: Research, Estimates), which owns CBS, MTV and Infinity Broadcasting, among others, is down 11.6 percent year-to-date. In addition to regulatory issues, Viacom's shares fell during its recent rate dispute with EchoStar (DISH: Research, Estimates).
1) Fertilizers and agricultural chemicals, up 27.4 percent. Companies that make fertilizers and pesticides, as well as lawn and garden products are doing well. Monsanto (MON: Research, Estimates), the one S&P 500 play in this area, is up 27.4 percent year-to-date. The herbicide maker has reported several quarters of improving results and has seen its stock rise, despite an ongoing investigation into financial irregularities at its Indonesian unit. Even in the broader S&P 1500 (which includes more stocks in this industry) the sector is one of the top performers. With spring just around the corner, analysts who track these stocks say they should keep doing well.
2) Wireless telecom, up 26.1 percent. Wireless stocks have surged this year, partly due to bargain hunting, but also on the heels of Cingular Wireless's recent $41 billion buy of AT&T Wireless (AWE: Research, Estimates). Among S&P 500 stock gainers this year, AT&T Wireless and Sprint PCS (PCS: Research, Estimates) are the biggest, adding 70.3 percent and 63.7 percent, respectively.
3) Casinos & Gaming. Slot machine operators and casino operators have been flying high under the radar for most of the quarter. A ruling that allowed Native American run casinos to install electronic gaming devices helped companies like slot machine maker International Game Technology (IGT: Research, Estimates), the S&P 500's no. 19 winner of the year, which gained 25.9 percent in the quarter. Strong January casino revenue in Nevada and other areas boosted the profits of the casino operators, as did the announcement of new development initiative. Other winners include Starwood Hotels & Resorts (HOT: Research, Estimates), up 12.6 percent, and Harrah's Entertainment (HET: Research, Estimates), up 10.3 percent.