By David StermanNEW YORK ( StreetAuthority) -- International expansion has been the top goal of hundreds of U.S. blue-chip stocks. Tapping foreign markets has been an easy way to keep sales and profits growing, usually with little risk. Until now. Even as Greek voters have chosen to stay on the path of austerity (for now), rising bond yields in Italy and Spain are signaling even more pain to come for the Europe. This coming earnings season is likely to be quite painful for many companies that have ventured abroad. Not only are many European economies in recession, but a number of emerging markets are feeling the pain as well. China, for example, has resorted to another round of stimulus to keep its economic deceleration from snowballing. That's why it's now more important than ever for U.S. investors to pay attention to their stock holdings that have significant exposure to Europe.
The key is to find these stocks when they have solid support in place in terms of their asset value. There are many bargains in the materials sector, which is great for long-term value hunters, but of little consequence to short-term traders.
The key is to focus on companies that appeared to perform quite well in recent quarters, shrugging off the foreign headwinds that had just been emerging. These headwinds are now growing stronger and it's hard to see how those companies can overcome the gravitational pull of a sagging Europe and Asia. David Sterman does not personally hold positions in any securities mentioned in this article. StreetAuthority LLC owns shares of AA, CSCO, PG, in one or more if its "real money" portfolios. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.