Stock Market Commentary -

The S&P 500's strong close on the final day of March accounted for nearly half of the first quarter return of 1.8%. Markets withstood a number of challenges, including a frigid winter, a crisis in Ukraine, and uncertainty over Federal Reserve policy. As investors digested the large gains of 2013, valuations came into focus and leadership shifted. Midcap stocks outperformed both large and small cap stocks and value stocks overtook growth. The strongest market sectors included Utilities and Healthcare, gaining 9.9% and 5.8%, respectively. Consumer Discretionary stocks, which had led in 2013, fared the worst in the first quarter, sliding 2.8%.

Strong European stock performance during the quarter evaporated with the onset of the Crimean crisis. The MSCI Developed Markets index finished with a slight gain of 0.8%. Emerging Markets declined early in the quarter, as estimates for China GDP growth were slashed further. A late rebound produced a nearly flat return of -0.4% for the MSCI Emerging Markets index. The DJ Wilshire Real Estate index surged 10.3% as interest rates retreated during the quarter.