Correlation - April 23, 2007 MARKET MOVERS An Unrelated...

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DOW JONES REPRINTS This copy is for your personal, non- commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit: www.djreprints.com . See a sample reprint in PDF format . Order a reprint of this article now . CAST YOUR VOTE 1 Question of the Day: 2 What's the best mix of U.S. and foreign stocks? MOVING APART See how global stock indexes are increasingly breaking free from their tendency to closely track U.S. stocks. April 23, 2007 MARKET MOVERS An Unrelated Story U.S., Global Stock Markets Increasingly Take Separate Paths By CRAIG KARMIN and JOANNA SLATER April 23, 2007; Page C1 For the first time in years, foreign stocks are behaving less like they are joined at the hip with U.S. shares -- good news for globally minded investors worried that U.S. economic growth may be slowing. Investors are increasingly preoccupied with the relationship between U.S. and foreign markets, particularly last Thursday, when a 4.5% drop in the Shanghai Composite Index led to declines across Asia. U.S. markets finished flat or slightly lower. Correlation -- the tendency of two markets to move in tandem -- is decreasing between U.S. and foreign markets partly because economic and earnings growth are diverging. For years, "as the U.S. market went, so went everything else," says Steven Auth of Federated Investors in Pittsburgh. The fact that markets are moving less in sync can be good news for global investors: It has the potential to smooth out the ups and downs of their overall returns. Textbook theory suggests that investing abroad helps to diversify a
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Correlation - April 23, 2007 MARKET MOVERS An Unrelated...

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