Market Insider

Is Wall Street too bullish?

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With stocks seesawing since the start of the year, earnings season has taken on more importance as a guide to stock market value. As a result, some big caps have been stumbling.

So the adage "As January goes, so goes the year" has created some concern among traders who see the swings as signaling a negative outcome. But when considering where the market is heading, it's worth taking a look at small caps, a group that has been outperforming recently.

The Dow has felt the brunt of high-profile earnings pain, with big names like IBM, Intel, Johnson & Johnson, General Electric and Verizon delivering a blow as they declined on disappointing earnings news. The Dow is off 1.2 percent since the start of the year. The S&P 500 was off just 0.2 percent Wednesday afternoon, trading just a few points below its Dec. 31 close of 1,848.