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July 14, 2014

Fund managers cheer corporate expansions

  • But once pocketbooks open up, investors should keep an eye out for companies that may be unfairly punished by short-term traders.
    • By STAN CHOE
    AP Business Writer

    NEW YORK — After years of funneling cash to investors, companies may be looking to spend more on themselves. Mutual fund managers are cheering, even if those dollars could have gone directly to them through dividends and stock buybacks.

    That's because increased corporate spending on new factories, equipment and computers could help push the economy into its next, more sustainable stage of growth. In the short term, it means companies that play a role in building the new factories or selling the new equipment would benefit from increased revenue. In the long term, it means that companies are investing in ways to drive future sales growth. Both would benefit the entire market.


     
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