New York Market: The news is good and getting better
Sunday 11 April 1999
"We buy high and sell higher," said Buck Newsome, its president. "These trends will continue for quite a while."
Gains in big stocks such as Citigroup helped the Dow Jones Industrial Average add 3.5 per cent last week. The S&P 500 gained 4.2 per cent and the Nasdaq jumped 4 per cent.
The stocks gains are good news for bonds, boosting tax returns. The government has reduced its borrowings and the Treasury bond market is shrinking. Kevin Kennedy, at Citibank, forecasts bond yields will fall to 5.25 per cent in the six months from 5.45 per cent now.
Everything seems to be going right for stocks. Interest rates, already near historic lows, have been falling. Profits for S&P 500 companies are projected to grow a respectable 6 per cent in the first quarter. That would exceed the 3.8 per cent rise in the whole of 1998.
And the news keeps getting better. The European Central Bank cut interest rates by half a percentage point. The Dow rallied 112 points amid expectations that the cuts would help revive slowing European economies plus Asia and Latin America. "It sets the stage for greater growth going forward, and that's important," said Robert Morris, director of equity investment at Lord Abbett.
About 36 companies have announced earnings for 1999's first quarter. More report this week, including semiconductor maker Intel, newspaper publisher Gannett, International Paper and AlliedSignal.
Stocks may seem quite expensive, with the Dow average well above 10,000 and the Nasdaq up 18 per cent year to date. Yet with the average New York Stock Exchange and Nasdaq Composite stock down by about a third from its high, investors are finding bargains.
Most investors and analysts agree stocks are fraught with risk. The latest fear is that Nato air strikes in Serbia will undermine the confidence of US investors. "Historically, military conflicts have caused a temporary downturn because they increase uncertainty," said Byron Wien, a Morgan Stanley investment strategist.
- 5 How the language you speak changes your view of the world
Lucy Hawking: Stephen Hawking's daughter writes impassioned open letter to Katie Hopkins about rights of disabled people
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
How the language you speak changes your view of the world
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...