The mood at the end of January turned somewhat sour as analysts and commentators reacted badly to disappointing earnings news. Disappointing fourth quarter 2014 earnings from major companies like Microsoft, Proctor & Gamble and Caterpillar triggered a sell-off in the markets. Analysts noted that the decline was not only because earning results were soft for many industry leaders, but also because overall indications for the rest of the year were not as rosy as once projected. Consequences from global events and issues that surfaced in the last half of 2014 had not been fully factored in analysts’ expectations. Falling oil prices certainly play a role in forcing down stock prices in the energy sector, but there are further factors – both positive and negative – involved in the stock market’s overall performance.
Here are some of these factors:
How will all this balance out? Will lower oil prices ultimately prove beneficial for overall economic growth and stock prices in the United States, or will decreased oil exploration put the brakes on economic expansion? The answer is not yet clear, but many analysts believe that the positive aspects will outweigh the negative – although most don’t expect clarity for several months.
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