U.S. stocks fell Tuesday after disappointing results at blue-chip companies like Microsoft Corp. and Caterpillar Inc. sparked concerns about the strong dollar's drag on earnings growth. Microsoft shares fell after the company set its financial forecast for the fiscal year, which ends in June, below Wall Street estimates, citing the strong U.S. dollar. The surge in the U.S. dollar has helped drive current earnings season's tepid outlook. The drop in oil prices and weak economic activity overseas are also contributing to low expectations. Concerns about a strong U.S. currency are driving some investors to small-cap stocks. The sector lagged behind the broader market in 2014, with the Russell 2000 index ending the year up 3.5% compared with the S&P 500's 11.4% rise. But with the strengthening U.S. dollar hurting multinational companies' profits, some money managers say now may be the time to move money into small-cap names.
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