NEW YORK MARKET
The Dow surpasses all expectations
Sunday 02 May 1999
Peter Canelo, investment strategist for Morgan Stanley Dean Witter, said he now expects to see the Dow between 11,400 and 11,600 at the end of the year. "I'm not sure it will stop there," he added. His target had been 10,250.
Since the Dow first closed above 10,000 on 29 March, the average gained 8 per cent more to 10,789.04. Better than expected earnings provided some of the impetus for target revisions, and may prompt more such changes later. Jeff Applegate, at Lehman Brothers, raised his target on the Dow to 11,500 from 11,000 and may raise it again "if earnings surprise again on the upside".
Individual investors are optimistic, too. Fidelity Investments said flows to its equity funds rose 77 per cent in April. Charles Schwab saw flows to stock funds in its mutual fund supermarkets surge six-fold.
"I feel better about the market than I did at the beginning of the year," said Marshall Acuff, an equity strategist at Salomon Smith Barney. "We now seem to be in a period where there are rising earnings expectations." The market's best-known optimist, Goldman Sachs' Abby Joseph Cohen, called first-quarter profit reports "absolutely stunning", and indicated she's prepared to raise her year-end forecast from the current 10,300 once most firms have reported.
Strategists said economic growth that shows no sign of faltering has got investors excited about stock. "The global economy is not falling apart and there is no slowing in the US economy," said Morgan Stanley's Peter Canelo. "Durable goods orders are higher and that's important for the cyclicals in the Dow."
GDP grew at a 4.5 per cent annual rate in the first quarter, above expectations for a 3.4 per cent pace.
So-called cyclical stocks, which lagged growth stocks in recent years, rallied in the last two weeks on anticipation they will benefit the most from global growth.
Investors and strategists are alert for any event that may cloud the rosy future. "There won't be a cataclysmic decline but the market is priced for perfection," said Martin Sass, president of MD Sass Investor Services.
- 1 Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
- 2 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 3 Nick Kyrgios calls former Olympian Dawn Fraser a 'blatant racist' after she tells Wimbledon star to 'go back where their parents came from'
- 4 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
Greece debt crisis: Angela Merkel and Francois Hollande issue Athens with 24-hour ultimatum to avoid crashing out of the euro
Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...