Stock Funds Rose In Q2 Thanks To A Strong June; Small-cap beat large-cap, and value clipped growth amid solid economic data.(SERIES: FUNDS & PERSONAL FINANCE/MUTAL FUND QUARTERLY)(IBD SPECIAL REPORT)

Byline: KEN HOOVER

U.S. stock funds had a positive second quarter and posted good results in June as the economy showed the strength of a weightlifter.

Critics complaining about a puny jobless recovery were silenced. On April 2, the Labor Department reported the economy buffed up with the creation of 353,000 new jobs in March, the best month since the good old days of May 2000.

That wasn't enough to slap stocks out of the lethargy that began in January when Alan Greenspan uttered the "I' word (for interest rates, which he planned to raise).

It took three job reports and the sudden realization there were 947,000 new jobs in three months to get the indexes off their lows for the year and into cheerful rally mode that began in mid-May.

When Greenspan's Fed raised rates on the last day of the quarter, as everybody on the planet expected, it didn't slow the markets down.

Then there was the smoothness of the handover of power in Iraq, which calmed the oil market.