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Oil's drop could leave a stain on earnings

Energy has been the weakest performing sector so far this year

Caroline Valetkevitch & Rodrigo Campos | Reuters  |  New York 

Heading into second-quarter earnings season, investors are looking for a continuation of strong US company results to justify high stock valuations, now trading near their loftiest levels since 2004. However, drilling a hole into that hopeful scenario is the current bear market in oil prices and an economy showing signs of growth below the pace expected earlier in the year. “A lot of the expectation for a recovery in earnings is predicated on oil prices being around $47-$50 a barrel,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York. ...

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First Published: Sun, June 25 2017. 01:36 IST