NEW YORK - Stocks are headed for a correction. No, stocks are rallying. Wait, stocks are down again. Or up.
For investors, June was one long seesaw ride that began with a plunge on the first day. Six days of declines were followed by a week of give and take and then four days of gains.
The month ended with strong earnings from a consumer bellwether and signs that a European debt crisis could be averted. That led to a four-day advance in the three major stock indexes.
The Dow Jones industrial average rose 480 points, or 4 percent, the last four days of the month, and the Standard & Poor's 500 index is on track for its best weekly return since last July.
The strong ending didn't make June a winner: Stocks were down about 2 percent for the month, the second straight month that the market finished lower. Still, all three indexes are up for the year.
Concerns about the strength of the U.S. economy and a possible debt default by Greece spooked investors much of the month. On June 1, investors were greeted with reports that U.S. manufacturing output had expanded at the slowest pace in 20 months, that auto sales had tumbled in May, and that companies had added the fewest number of employees since September. By June 15, the S&P had lost nearly all of its gains for the year, before dividends.
Market declines mean different things to different people. Rather than retreat further, some investors came to believe that stocks were relatively cheap - and provided a buying opportunity. Stocks began to reverse course.
The climb continued this week when Nike Inc.'s earnings came in much higher than analysts had expected. That indicated that higher gas prices hadn't stopped consumers from splurging on things like pricey sneakers and sportswear. In the last four days of the month, the S&P rose 4.1 percent.
Most economists, analysts, and investors agree that, at the very least, the U.S. economy has struggled through a soft patch. The weakness was brought on by gas prices that hit $4 a gallon, problems getting computer chips and auto parts from Japan after the March earthquake there, and severe weather in the South. These factors weighed on consumer spending and confidence and made recession-weary companies reluctant to hire employees or expand domestically.
Whether the late June rally continues into July depends partly on results from earnings reports and lingering effects of that soft patch.
Most stock analysts think the economy's troubles are temporary. Few have lowered their estimates during the last month despite a dip in consumer spending and continued high unemployment. Even if Americans spend less, they reason, U.S. companies continue to make a significant portion of their profits overseas.
