While the equities markets and stock exchange traded funds (ETFs) listlessly finished the month, the overall market strengthened as investors returned to the riskier cyclical sector stocks.
The Dow Jones Industrial Average finished January up 3.4% and the S&P 500 rose 4.4%. The Nasdaq added 8.0% for the month.
The stock markets opened the New Year with a strong start, supported by solid economic data. Corporate earnings were mostly higher, coupled with better growth numbers. Additionally, the economic outlook improved after better manufacturing numbers.
The Federal Reserve also pledged to maintain near-zero rates until late 2014, boosting confidence in riskier equities.
However, E.U. concerns and rating downgrades on Eurozone sovereign debt kept a lid on stock gains and dampened stocks at the end of the month. In addition, poor new home sales and weaker-than-expected U.S. GDP growth kept the markets from finishing higher.