Equities lose ground, bonds perform better

After three strong months, equity markets took a break in April. The weakness was widespread, with the S&P 500 Index finishing down 0.63 percent and the Nasdaq down 1.46 percent. The lackluster market performance was somewhat inconsistent with what on the surface was strong U.S. corporate earnings performance. As of month-end, 72 percent of S&P 500 companies had beaten analyst earnings estimates. Part of the reason for the high “beat” percentage appears to have been the result of analysts adjusting their first quarter estimates too far downward. That, combined with disappointing guidance from several major firms, prevented a continuation of the equities rally.