Emerging Concern, Shiny Apple

While Apple (AAPL Quote) shined, emerging-market stocks had a bad day Tuesday, thanks largely to Venezuela President Hugo Chavez's plans to nationalize his country's telecom and power industries.

But a bad day shouldn't be extrapolated to mean the global economy is suddenly weak, or that risk appetite is waning on a large scale. The plunge in emerging markets reminded many traders of late April and early May 2006, when emerging market stocks sold off ahead of U.S. stocks.

Indeed, an emerging market selloff may well be the crack in the rally that gives investors reason to kick off a correction in the U.S. stock market. But it doesn't necessarily foreshadow a weak economy or impending disaster. ...