NEW YORK A year after the stock market hit bottom and began a spectacular comeback, it's getting harder to dazzle investors.
Monday was a perfect example of what the market is all about. The Dow Jones industrial average fell 14 and the other major indexes were narrowly mixed as stocks stalled after a big rally Friday.
There was upbeat news, the kind that often sends stock higher: Insurer American International Group reached a deal to sell one of its major foreign divisions to MetLife for $15.5 billion. And Royal Dutch Shell and PetroChina offered to buy Australia's Arrow Energy for $3 billion in cash and stock.
But investors who rocketed the Dow up 61.2 percent from the 12-year low of 6,547.05 it hit March 9, 2009, weren't impressed enough to extend the previous day's big advance.
That kind of caution is the reason the Dow is up just 1.2 percent in 2010. It has stumbled through the first two months of the year because the news just hasn't been good enough to keep the momentum going.
"We still have the opportunities for further gains but expectations have improved," said Stu Schweitzer, global markets strategist at J.P. Morgan's Private Bank in New York. "So we have to exceed higher expectations now for the market to keep going."
A year ago, investors were buying on the first glints of an improving economy. It started with the news on March 10 that Citigroup, the bank hardest hit by the financial crisis and recession, was turning a profit. Investors were so excited that they sent the Dow up 379 points.
During the course of the next year:
The Standard & Poor's 500 index has gained 68.3 percent from its 12-year low of 676.53. The return is greater when dividends are included.
The technology-dominated Nasdaq composite index has risen 83.8 percent and ended Monday at an 18-month high.
Financial company stocks devastated by the credit crisis and recession have led the market higher. Citigroup, which fell to a low of 97 cents before closing at $1.05 a year ago, was up 239 percent to $3.56 by Monday's close.
The climb has been fairly steady, but it has also shown signs of stopping when it looked like the economy might founder. In June, it was concern about corporate profits and the pace of the market's climb. And last month, it was fears that debt problems in Greece and other European countries could cripple the global recovery.
The number of job losses has gone from around 700,000 per month a year ago to 36,000 in February. The unemployment rate is down but it is still higher than it was a year ago.
History shows that the market often heals before the job market does. There may be another impediment that's holding the market back: Many traders think stocks aren't worth more than what they cost now. Most of the bargain stocks have gone up enough, they say. Bank of America has gone from $3.75 to $16.74. Ford Motor has jumped from $1.74 to $12.93.
Investors are also concerned about one of the great unknowns: How will the economy do when the government pulls back on the economic stimulus measures it began putting in place as the financial system was crumbling in late 2008.
With little to go on, there is a risk that traders will again become nervous that stocks have risen too fast. Some have a "when in doubt, get out," mentality.
Schweitzer said he still has plenty of concerns but fewer than he did.
"My job is to worry," he said, adding: "It's less scary than it was a year ago."