Cost-cutting begins to pay dividends

The US equity rally that began in mid-March has propelled the S&P 500 and the Nasdaq indices to levels not seen in almost a year. A quick resolution to the Iraqi conflict and an earnings season with limited negative news have driven stocks higher, particularly the more volatile stocks that had been laggards earlier in the year. At current valuations, stocks appear to be priced for perfection. The first quarter earnings season ended with the majority of companies achieving or surpassing analysts' expectations for quarterly profits. Widespread corporate restructurings and cost-cutting pro...