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Individual stocks that rose in 2005 did so because they were part of the subgroup that reflects Americas love for gasoline and gadgets. Among winners were Apple Computer and Google. Productivity and consumer spending drove the economy, says a consultant who works on the Shareholder Scoreboard. A spokesman for Wells Capital Management also said there was a distinct change in economic sentiment in the middle of the year that increased the difficulty of finding one broad trend that dominated the whole year. In the first few moths of 2005, investors thought U.S. economic growth was slowing down and that the Federal Reserve would stop raising interest rates. However, the economy stayed steady, and interest rates continued to rise. Therefore, cyclical sectors, including technology, which do better when economies grow, did well. However, the performance of the U.S. stock market for the year was blah, with the Dow Jones Industrial Average ending 2005 down 0.61 and the tech-heavy NASDAQ Composite Index moving up only 1.4%. Some of the best performers were small. Examples include Cheniere Energy, a developer of liquefied natural gas terminals, and Chico's FAS, which quadrupled in size in only three years. Automakers and their suppliers, including Lear, GM, and Ford Motor, were among those that did the worst. Specialty retail stores that have concept-driven models have consistently done better than broad-line retailers in the past decade, and a company that could continue its comeback is Foster Wheeler, which has been helped by better conditions for clients in the oil, gas, power, and chemical industries.
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