A Cooler Climate for Growth Stocks

With interest rates expected to climb, S&P's Mark Basham's starts his very short list of buys with WebEx and Invitrogen

So far this year, small-cap stocks are doing better than their larger siblings. Year to date, the Standard & Poor's SmallCap 600 is up 3.9%, against 0.8% for the S&P 500. That's the word from Mark Basham, director of emerging growth equity research for S&P. However, during the second quarter, the pattern has basically reversed. And with interest rates expected to rise, Basham thinks investors will be more cautious about risks and thus somewhat cooler on growth stocks.

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