This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Investors Shift Focus To Growth Stocks

As yields have risen, the big dividend-paying stocks, utilities and telecommunication companies, have fallen.

HOPEFUL SIGNS ON EARNINGS

Another reason investors are starting to take a shine to technology stocks is that their earnings are showing signs of picking up.

Microsoft delivered solid results last month from its Office, software tools and Xbox divisions.

Google, the leader in Internet search, raised prices for ads distributed to smartphones and tablet computers. The company's stock climbed above $900 for the first time May 15.

Even the outlook for Hewlett-Packard is improving. The company's stock surged 17 percent Wednesday after the struggling PC maker reported quarterly earnings that weren't as bad as analysts had been expecting. That encouraged investors to think that HP's turnaround strategy may succeed.

THE CAVEAT

The nascent rally in growth stocks may be short-lived if the economy fails to build on its performance in the first quarter, says Barry Knapp, head of equity strategy at Barclays Capital.

Barclays predicts that U.S. growth will slow to 1.5 percent in the second quarter, from 2.5 percent in the first quarter, as the economy is held back by government spending cuts.

"If it becomes clear that we're growing at that sort of a rate in the second quarter, and we don't see much of a pickup in the third quarter, I don't really see how the cyclical names could continue their current bounce," says Knapp.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
4 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs