The Russell 2000 Index of companies with an average market value of $901 million set records this month, extending its gain from March 2009 to 206 percent, according to data compiled by Bloomberg. Banks in the S&P 500 have risen 27 percent this year to the highest levels since 2008. The Morgan Stanley Cyclical Index of 30 companies, including Whirlpool Corp. and Hewlett- Packard Co., reached a record on July 19.

Indexes Peak

All three indexes and transports peaked within 35 days of each other in 1989. The S&P 500 went on to gain about 7 percent in the next 10 months. In July 2007, the four groups were already beginning to slump and the S&P 500 rallied the next three months to hit an all-time high 1,565.15 on Oct. 9.

In 1999, the benchmark gauge advanced about 15 percent in the 11 months after cyclicals, banks and the measure of shipping companies reached a high.

Increases by the measures have foretold economic expansion in the past. Small-caps surged 39 percent from April to October 1997 and went on to set a record in April 1998. U.S. GDP grew 4.5 percent in 1997, the fastest since 1984, and climbed 4.8 percent by 1999, data compiled by Bloomberg show.

Wharton Learning

“It is very typical, almost prototypical, of a classic early-stage recovery,” Rich Weiss, the Mountain View, California-based senior money manager for American Century Investment who helps oversee $130 billion, said in a July 17 phone interview. “It is what I learned at Wharton 30-something years ago, and it still holds true today. Those are the classic early-cycle sectors and indicators.”

Earnings for financial firms, the second-biggest group in the S&P 500 after technology shares, increased 26 percent last quarter, more than any other industry, analyst estimates show. Profits are expected to climb 14 percent for cyclicals in 2014, about 3 percentage points more than the full market.

The median stock in the Russell 2000 is up 8 percent in the last 30 days, according to data compiled by Bloomberg. Alliance Fiber Optic Products Inc., the maker of communications parts, gained 141 percent this year. After beating earnings estimates for four consecutive quarters, the Sunnyvale, California-based company will report that profits more than doubled last quarter, according to research firm B. Riley & Co.

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