Goldman Sachs downgrades stocks to neutral for the short-term

July 25 Fri Jul 25, 2014 3:57pm EDT

July 25 (Reuters) - Goldman Sachs downgraded its global allocation to equities to neutral on a short-term basis on Friday, even though the brokerage remains overweight stocks for the longer term, it said in a research note.

The firm said it is worried that a rise in rates will drive stocks lower over the next three months, adding that "we also expect the general pace of returns to slow compared to what we have seen in the last couple of years." (Reporting By David Gaffen, editing by Ross Colvin)