It is a healthy sign.

Markets were rattled last week as the Nasdaq NDAQ Valuations remain above long-term averages, while U. That is exactly kind of environment that calls for a bumpier stock market, investors say.

He expects that as investors get more comfortable with the global economic outlook, stocks will resume their rally. With this outlook, some investors are selling riskier investments but they are staying in stocks, only purchasing what they see as safer alternatives—dividend-paying utilities, consumer companies and pharmaceutical firms.

Others are hunting for what they feel are unfairly punished names among faster-growing companies. These bullish fund managers fully expect stocks to bounce back, contending that steady economic growth, low interest rates and an accommodative Federal Reserve will set stocks to resume their rally before long.

Greene declined to say which stocks he has been buying. The fund itself has dropped 7. In their place, he has been buying shares of semiconductor and large pharmaceutical companies, he said. The Lord Abbett Developing Growth Fund, co-managed by Mr.

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The whipsaw trading of late matches what many observers had predicted for Still, he takes heart in the fact that prospects for bond-market returns remain bleak, and expects higher interest rates could lead to a pickup in corporate spending and bank lending, spurring economic growth. Others are biding their time, but ready to buy if tech-sector darlings continue to slide.

Stock-Market Jitters Put Investors at Ease – Stock Market Bloggers

One reason investors say stocks have been ripe for a pause is valuations, which are still on the rich side. That compares with an average of But some investors say the breather also may leave stocks better prepared to weather what is expected to be a sluggish earnings season in coming weeks. This marks a change from the experience over the past few years, when stocks rallied even as earnings expectations were slashed.

During those periods, analysts have taken down their estimates by an average 3. This time around, Wall Street analysts expect first-quarter profits to post a 1. Meanwhile, during the first quarter of , the index gained just 1.