Not just earnings

This AP article offers numerous reasons for US stocks recent decline. Naturally one problem is the earnings we see coming out:

While results have been far from bad, fewer companies are beating expectations than in past seasons, underscoring the idea that 2005 will be a year of more humble returns.

But there’s more. Interest rates are expected to climb (though financials have seen the same decline as the larger market despite being more senstive to interest rate hikes).

Investors are nervous because this is a transition year with earnings growth expected to decline from double digits to single digits. Investors also don’t like rising oil prices.

So we’ve got a number of things dragging markets down. As i always I like dividend stocks, but during volaile times, everyone likes them. In addition to investing more in global equities, US investors are looking for dividends:

Since the year began, investors have shown a distinct preference for higher-quality issues, especially those that pay dividends, said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

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