NEW YORK -- Stock investors were hit from all sides in January.
Concerns about the global economy and U.S. company earnings, as well as turmoil in emerging markets, led major indexes to their worst month in two years.
However, many investors remain hopeful that the problems in January will not spill over into the rest of 2014. They even see this month's downturn as healthy, given the U.S. market's torrid 30 percent rise last year.
The Dow Jones industrial average fell 5.3 percent in January, the worst start to a year since 2009. The Standard & Poor's 500 index fell 3.6 percent this month and the Nasdaq composite fell 2 percent.
Many investors expected 2014 to be a more muddled and volatile for the market. Market strategists late last year were looking for the S&P 500 index to notch a modest gain of 4 percent to 6 percent, ending in the range of 1,850 to 1,900.
Investors were also looking for more pullbacks this year and possibly a correction, the technical term for when a stock market index like the S&P 500 falls 10 percent or more. Three months ago, analysts at Goldman Sachs said there was roughly a 60 percent chance that a correction would happen this year.
"People did look at these stock market valuations at the beginning of the year with a degree of nervousness," said David Kelly, chief market strategist with J.P. Morgan Funds. "A correction would probably be healthy for the market."
Wall Street is in the middle of earnings season, when the country's major corporations report results for the final three months of the year. Half of the members of the S&P 500 have reported, and the results have been mixed. While fourth-quarter corporate earnings are up a respectable 7.9 percent from a year earlier, companies have been cutting their full-year outlooks and reporting weaker sales, according to data provider FactSet.
Wal-Mart, the nation's largest retailer, said Friday that earnings may come in at the low end or below its prior forecasts. It also expects sales at stores open at least a year to be flat. The company previously forecast that sales would be modestly higher.
Wal-Mart's forecast echo the comments from Macy's, Target, Best Buy and other retailers.
Of the companies who have reported so far, 44 companies have cut their full-year profit outlooks while 10 have increased their outlooks, according to data from FactSet.
On Friday, the U.S. stock market closed out January on yet another down note. The Dow fell 149.70 points, or 0.9 percent, to 15,698.91. The S&P 500 dropped 11.61 points, or 0.7 percent, to 1,782.57 and the Nasdaq lost 19.25 points, or 0.5 percent, to 4,103.88.