U.S. stocks on Tuesday hit a four-year high, but the economy continues to flounder amid what economists regard as one of the weakest recoveries in recent memory.
The SandP index soared to 1,426.68, the highest point since May 2008, before reversing course by day' s end. A recent spate of positive numbers including housing sector figures, payrolls and retail sales boosted U.S. stocks, in addition to the expectation that central banks will soon take action to bolster the economies worldwide.
But putting a damper on that news are expectations down the road, mirrored in the latest recommendation by investment giant Goldman Sachs, that investors should dump their stocks before the U.S. plunges headlong into fiscal turmoil.
In a note to clients, Goldman Sachs U.S. head equity strategist David Kostin told clients to pull out of stocks, as he predicted that Congress would "fail to reach agreement in addressing the fiscal cliff," a possibility that "is greater than what most investors seem to believe based on our client conversations."
Read more: U.S. Economy Still Stumbles despite Wall Street at 4-year high
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