Readers Speak: More Regulation for Swaps

The country s economic recovery, the anniversary of a market bottom and credit-default swaps each made headlines this week, and SmartMoney readers voiced their opinions on those issues in our daily polls.

Here s where you stand. You re mixed on whether the economy is on the right track. You say the tech and energy sectors have the most room for growth this year. And you largely agree that credit-default swaps should be regulated more closely.

The polls were conducted during a five-day stretch when the market made small but steady gains. The Dow Jones Industrial Average crossed 10,600 before stalling Friday on a stagnant business inventories report and disappointing sentiment data. Still, several economic indicators released this week offered reason for optimism, including a surprising bump in retail sales for February, a decline in household debt, and a drop in jobless claim numbers albeit smaller than expected.

When asked whether the economy is on the right or wrong track, SmartMoney.com respondents were mixed. Forty-four percent of respondents said it s on the wrong track; 35% said it s on the right path and 21% were unsure. The results reflected recent, conflicting economic data. Unemployment remains stubbornly high, and this week, RealtyTrac.com reported that foreclosures increased in February compared to the year-ago period. On the other hand, more than 70% of companies that have reported earnings for the last period have beaten Wall Street forecasts this quarter.

This week marked the one-year anniversary of the recession s market bottom, when the Dow closed at 6547. Stocks have gotten a broad bounce since then, but many investors are turning more selective. SmartMoney readers shared their thoughts on which sector had the most running room, and 35% said that tech looks promising for 2010. Twenty-two percent of respondents said they favored energy. Fifteen percent chose financials; 8% picked pharmaceuticals; and 7% chose real estate.

Credit-default swaps are coming under more scrutiny as the financial crisis in Europe continues. On Friday, Securities and Exchange Commission Chairwoman Mary Schapiro called for more supervision of credit-default swaps in front of U.S. policymakers and regulators. These financial instruments have been implicated in the Greek debt crisis and in Lehman Brothers' and AIG (AIG) woes. Most SmartMoney respondents agree with the SEC chairwoman; 85% say credit-default swaps need to be regulated more closely; 9% are unsure; and 7% say they don t need more regulation.