|
Wall St. hit by Cohen
|
 |
March 28, 2000: 5:31 p.m. ET
Strategist's portfolio juggling spooks investors as Nasdaq and Dow fall
|
NEW YORK (CNNfn) - Investors heeded one of Wall Street's best-known market strategists Tuesday, reducing stock positions after Abby Joseph Cohen advised such a move.
Cohen, investment strategist at Goldman Sachs, also warned that high-flying technology shares might not have much room left to grow.
Money fled the tech-heavy Nasdaq composite index, which posted triple-digit losses. The Dow Jones industrial average fell for the second straight session, hurt by weakness in Intel, Hewlett-Packard and IBM.
"It's interesting (the Cohen news) had such broad ramifications today," Greg Hymowitz, money manager at EnTrust Capital, told CNN's Street Sweep, noting that the Goldman strategist focuses her research on the S&P 500.
But in a quiet news period after the Federal Reserve's latest interest-rate hike and ahead of first-quarter earnings reporting season, analysts said Cohen's comments met a market looking any reasons to buy or sell.
"When you are directionless like we are right now, people are looking for something to hang their hat on," John Pickett of LaBranche & Co., told Street Sweep.
The Nasdaq fell 124.56 points, or 2.5 percent, to 4,834.00.
The Dow, meanwhile, shed 89.74 to 10,936.11, building on Monday's 86.87-point loss.
The broader S&P 500 dropped 16.13 to 1,507.73.
More stocks fell than rose. But trading volume was light for the second straight session. Declining issues on the New York Stock Exchange outpaced advancing ones 1,656 to 1,377, with volume barely topping 950 million. Nasdaq losers beat winners 2,772 to 1,522. Only 1.4 billion shares changed hands.
 In other markets, the dollar fell against the yen but gained versus the euro. Treasury securities finished mixed.
Cohen hits Nasdaq
Pinning her allocation changes to the recent rise in stock prices, Cohen advised cutting equity positions to 65 percent from 70 percent.
The hypothetical 5 percent Cohen took from equities was moved into cash, which previously had no allocation. Bond positions remained at 27 percent, while commodities held steady at 3 percent.
And the well-known bull repeated a note of caution on technology, first contained in a March 16 report.
"For the first time in a decade, our model portfolio is no longer recommending an overweighted position in technology," she said.
Cohen instead said she sees more opportunities in financial stocks, which were some of Tuesday's best performers.
"We have to respect what she has to say," said Barry Hyman, chief market strategist at Ehrenkrantz King Nussbaum. Hyman said he agrees with Cohen's comments that stock investors should not expect the sky-high returns of the recent past.
The cautionary note to clients comes as the Nasdaq is up about 21 percent this year.
Terrence Gabriel, stock market strategist at IDEAglobal.com, said much of those gains come on expectations for a strong first-quarter earnings season. But those gains may already be factored in.
"It's had such a great ride," Gabriel said. But a lot of that ride has been "already priced into the market." As such, Gabriel sees money flowing into cheaper, beaten-up stocks in the days ahead.
That appeared to be the case Tuesday.
American Express (AXP: Research, Estimates) jumped 2 to 152-1/2 and J.P. Morgan (JPM: Research, Estimates) gained 1-7/8 to 133.
Stanley Nabi, portfolio manager at DLJ Asset Management, told CNNfn's market coverage he sees opportunity in beaten-up sectors like these. (390K WAV) (390K AIFF).
In stocks in the news, Microsoft (MSFT: Research, Estimates), a Dow member, gained 1/4 to 104-5/16 after the software maker got more time to try to settle the government's antitrust case against it.
But other tech stocks didn't fare as well. Hewlett-Packard (HWP: Research, Estimates) shed 5-3/8 to 140-13/16, Intel (INTC: Research, Estimates) lost 7 to 135-11/16, and IBM (IBM: Research, Estimates) fell 4-1/2 to 122-3/8.
Waiting for OPEC
Wall Street again watched OPEC Tuesday. After the close of trading, the 11-nation oil cartel once again failed to reach consensus on crude-oil production.
The standstill comes as oil prices tripled during the last 12 months, a development analysts fear could hurt profits across many industries and spark an outbreak of inflation.
Exxon Mobil (XOM: Research, Estimates), the world's largest oil producer, dropped 3/16 to 76-5/16.
But UAL Corp. (UAL: Research, Estimates) jumped 2-5/8 to 59-5/8. The parent of United Airlines announced after the market closed Monday that it would have better-than-expected first-quarter results, despite a steep rise in jet fuel prices.
Bank One Corp. (ONE: Research, Estimates) rose 2-1/2 to 34-1/2 after late Monday naming former Citigroup president James Dimon as chairman and chief executive officer. Dimon said he would buy 2 million shares of Bank One stock, which is off 41 percent in the last 52 weeks. 
|
|
|
|
|
 |
|
