Here’s Why U.S. Stocks May be Headed Higher

U.S. stocks were back up to their old tricks last week, as volatility waned and financial, industrial and retail stocks waxed. It was a week in which risk was in fashion - until Friday, when the U.S. Securities and Exchange Commission (SEC) hammered Goldman Sachs Group Inc. (NYSE: GS ) with fraud charges related to the subprime-mortgage crisis. With that, playing defense was considered offensive. Leading the way forward were companies that are the ultimate in beta and hopefulness - such as beaten-down bond insurer Ambac Financial Group Inc. (NYSE: ABK ) , which rose 60%, beaten-down car parts maker American Axle & Manufacturing Holdings Inc. (NYSE: AXL ) , up 10%, beaten-up retailer Tuesday Morning Corp. (Nasdaq: TUES ) , up 24%; and beaten shoemaker Crocs (Nasdaq: CROX ), up 20%. We're not talking, here, about investors who last year bought the shares of companies that were left for dead; these stocks might actually be worth something in an economic turnaround.