By: Money Morning
July 11, 2011 at 07:28 AM EDT
These Stocks Will Shine Through the Bulls and Bears Standoff
Market bulls and bears are at a standoff as global economic recovery struggles - but not all stocks are in danger of slipping. Major U.S. stock indexes inched higher by 0.5% to 1.5% over the past week as optimism that companies will report higher second-quarter profits outweighed fears that job growth is crashing. But the final day of the week was a downer, with losses across the board and across the world following a terrible report on U.S. employment. Yet the mood remains strangely buoyant -- as if investors just can't believe that more than $2 trillion with of fiscal and monetary stimulus have bought the worst recovery in the postwar era. Breadth has been the hallmark of the recent advance, but it was terrible on Friday -- with losers outpacing gainers by a four to one margin. Stocks drifted in a range so narrow at midweek that if you turned it sideways you couldn't see it. The bears had a chance to knock sentiment down once Moody's (NYSE: MCO ) credit rating service kicked Portugal's sovereign debt down under the counter, below the sink and into the basement, and a fairly nasty report on the U.S. service economy followed. But bulls found a way to pump a few more molecules of helium into their uptrend, and the major indexes ended in the green. And now we have a standoff, the bulls and bears looking at each other over the barricades with a gleam in their eyes -- each knowing without a doubt that they are about to take down the other. I would love to be optimistic, but the data that I see suggests the world has entered into a cyclical industrial slowdown that has crippled business confidence and job growth. So even if second quarter earnings are good, outlooks will likely be poor. And ultimately that means stock prices will peak. Click here to continue reading...
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