Are U.S. stocks set for a down year?

The adage ‘as January goes, so goes the year’ bodes ill for equity investors after the S&P 500 closed out its worst month in almost a year. In the coming week, they will have to contend with fears of sovereign defaults and the potential for unpleasant surprises in the U.S. labor market.

U.S. corporations have so far handily beat analysts’ earnings forecasts. With heavyweights like Exxon Mobil Corp (NYSE:XOM – News) and United Parcel Service Inc (NYSE:UPS – News) set to report next week, investors will be looking for that to continue, going some way to offset the perception that political risk is on the rise.

The Standard & Poor’s 500 Index (^SPX – News) fell 3.7 percent in January and is off nearly 7 percent from its high this month. [Read the full article]

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