"The split outcome of the Italian election raises new questions about the long-term fate of the euro and the health of the eurozone economy," says Fred H. Dickson, CMT senior vice president, chief investment strategist of Davidson Companies.
Wall Street rebounded this week when reports of strong housing markets eased concerns over that critical sector in the recovering U.S. economy. Federal Reserve Chairman Ben Bernanke's pledge of more stimulus policy to keep the economy on track gave further confidence for Wall Street's recovery.
But investors should probably think twice about chasing after housing stocks after a solid year of recovery. The iShares Dow Jones US Home Construction Index Fund is up more than 80 percent in a year and might not have much further to go.
Investors were looking more widely for gains in areas that could benefit from a housing recovery and a strengthening overall economy. Materials, consumer discretionary, and energy led in the rally, Dickson notes. Two broad-based funds in the space from U.S. News Best Funds are the top-ranked Vanguard Consumer Staples Index Fund and the iShares Dow Jones US Consumer Goods Sector Index Fund, both of which have risen close to 10 percent in the past year.