Large-caps show signs of return

NEW YORK – All eyes have been focused on the Dow Jones industrial average as it moves in fits and starts toward a new all-time record for the first time in six years.

One reason the Dow has been testing six-year highs is that investors, who have heavily favored the stock in small- and midsize companies since the 2000-2002 crash, have newfound appreciation for large-cap equities, experts say.

There were signs last year that a shift was under way, but it didn’t materialize, leaving analysts a bit skittish about calling the turn now.

“I can’t jump up and down yet,” said Jack A. Ablin, chief investment officer at Harris Private Bank in Chicago. “But I’m encouraged by the signs.”

Ablin’s been watching the Standard & Poor’s 100 index, a broader measure of large cap stocks than the 30-equity Dow, and he said that “what we’re finding is, since the end of March, the largest companies are starting to outpace the small.”

The S&P 100’s large-cap companies underperformed the small- and mid-cap companies in the Russell 2000 by almost 55 percent over the last five years. But since the end of March, the S&P 100 gained nearly 3 percent before dipping in recent days; the small- and mid-cap Russell 2000, meanwhile, was up less than 2 percent.