Market’s slow start might bode ill for 2014

NEW YORK — The stock market’s sluggish start in 2014 might not be what investors expected after last year’s strong finish.

As of Wednesday, the fifth trading day of the year, the Standard & Poor’s 500 index was down 0.6 percent for 2014, after falling four of the five days. A year ago, the index had climbed 2.2 percent, getting a boost after lawmakers passed a bill to avoid government spending cuts and tax increases. Stocks also got a lift after the government reported hiring remained up.

The index built on that strong start and climbed almost 30 percent for the year. But after ending 2013 at a record high, it stumbled.

Stocks that ended last year poorly are leading the decline so far. Telecoms, consumer staples and utilities all lagged the overall market in the last month of 2013.

While these stocks pay big dividends, their growth prospects are limited and investors are ditching them in favor of stocks that should benefit as the economy improves.

“I don’t think we should be too concerned,” about the early slump, said David Kelly, chief global strategist at JPMorgan funds. “There’s a certain amount of rebalancing going on, which is completely appropriate after the big year that we’ve seen.”

Five days might not make a year, but by some measures, the weak start is a bad omen for the market.

The Stock Trader’s Almanac said if the S&P 500 rises during the first five days, the index has an 85 percent chance of ending the year higher, based on 40 years of data.

The last time the index fell during that stretch was in 2008 — when the S&P 500 slipped 5.3 percent — as the stock market reeled in the aftermath of the financial crisis.

The index ended the year 38.5 percent lower as the Great Recession took hold.

Others prefer to give the market more time before assessing a trend. As goes January, so goes the year, is the classic Wall Street adage.