Trader Warren Meyers works on the floor of the New York Stock Exchange on Friday. Just a few months ago, investors thought the economy would expand rapidly this year. Now they’re not so sure and shifting their money around in surprising ways in a sign that a fragile confidence still haunts the recovery five years after it officially began.NEW YORK- Wall Street has caught a case of the jitters.
Employers are hiring at their fastest pace in 2 ½ years, the economy is expected to expand by a robust 3.5 percent this quarter and corporate earnings have hit a record. But you wouldn’t know it from the way many investors are acting.
They’re pouring money into U.S. Treasury bonds, considered the world’s safest asset. They’re loading up on dull, but reliable utility stocks. They’re dumping holdings that would get hurt most from a stalled recovery, like stocks of retailers and risky small companies.
Just a few months ago, investors thought the economy would grow rapidly this year. Now they’re not so sure and shifting money around in surprising ways, a sign that confidence remains fragile five years into a recovery.
“It doesn’t take much – an itsy-bitsy sell-off – and suddenly everyone is conservative,” says Jim Paulsen, chief investment strategist at Wells Capital Management. “We’ve climbed a wall of worry throughout this recovery and we’re still doing that.”