Investors turn to cherry picking after rally

NEW YORK: After the surge in stock prices this spring when investors jumped back into the beaten-up asset class, attention is now turning to cherry-picking individual stocks in the right sectors.

The S&P 500 index climbed as much as 40 percent after hitting a 12-year closing low on March 9, helping all 10 S&P sectors advance in the second quarter.

But the drive was to snap up the most beaten-down companies regardless of outlook or fundamentals - the 50 stocks in the S&P 500 that did the worst in 2008 were the best performers in the first half of 2009, according to Birinyi Associates, gaining an average 35 percent.