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The Dow at 10,000?
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September 17, 1996: 6:49 p.m. ET
Portfolio manager Alger says bellwether average will double by 2000
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NEW YORK (CNNfn) - Could the Dow Jones industrial average hit 10,000 by the year 2000? If you ask David Alger, the answer is a confident "Yes."
"I'm very bullish," Alger, portfolio manager at the Alger Fund group of mutual funds, told CNNfn on Tuesday. "I think the market definitely is going to hit 6,000, maybe by the end of the week... I think it's certainly going to reach 7,000 by the end of next year and 10,000 by the end of the decade."
Before you dismiss his optimism, take a glance at some of the factors Alger says will keep the market rallying well into the next century.
Alger, who manages a handful of funds from his New York office, suggests a combination of minimal inflation, consistent profits and money from Baby Boomers will lift stocks beyond the record levels they are currently setting. The market will keep rising at least until 2010, he maintains, when the first wave of Boomers retire and begin selling off assets.
"I think corporate America is much more profitable than it ever was. And as profits grow, so will the stock market," he said.
Alger's optimism is not limited to the long-range outlook. In the near-term, he looks for the U.S. economy to slow in the second half of the year, possibly prompting the Federal Reserve to cut interest rates by 0.25 of a percentage point. That will spur on blue chips and small cap issues. (WAV79K) (AIF79K)
Why a rate cut when other Wall Streeters are adamant about a rate hike? The Fed doesn't want to snuff out economic growth entirely, Alger said. Once it sees that growth has slowed to an annualized 2 percent, the central bank will lower to kick start the economy.
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