6 Blue-Chip Stocks On Sale

In this crazy market, many high-quality companies are selling at relatively cheap prices. Our favorite: Microsoft.

Despite many troubling developments around the world, the U.S. stock market has marched merrily upward. From late August through December 9, Standard & Poor’s 500-stock index advanced 18.5%. Yet interest rates have risen materially, notwithstanding the Federal Reserve’s latest round of monetary-policy easing. Since early October, yields on ten-year Treasuries have jumped 34%, to 3.2%. Higher interest rates raise the cost of borrowing, making fixed-income investments more competitive with stocks and usually slowing economic growth.

There’s more. The U.S. unemployment rate has climbed to 9.8%. The housing market has worsened, with sales slowing and prices weakening. The European debt crisis has reappeared, requiring a bailout of Ireland and raising new concerns Spain, Italy and Belgium. Last but not least, North Korean military forces shelled South Korea, the world’s 15th-largest economy, raising tensions in one of the world’s most-volatile areas.

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Whitney Tilson
Contributing Editor, Kiplinger's Personal Finance