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Experts on Dow 10,000
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March 12, 1999: 2:50 p.m. ET
Strategists weigh significance of history-making market
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NEW YORK (CNNfn) - Some called it a historic milestone. Others dubbed it a psychological blip. Either way, Dow 10,000 was tough to ignore as the county's best-known market measure touched five-digits for the first time in its 114-year history. Soon after, analysts began predicting the market's next move. Included below are some predictions as well as a series of market views leading up to Tuesday's latest Dow ascent.
Here's what top analysts have told CNNfn.
Vince Farrell, chief investment officer at Spears, Benzak, Salomon & Farrell, said that after striking 10,000 the Dow would make a quick, short-term retreat. So far, he's been right. Looking ahead, he likes natural gas stocks, sees oil prices as finally stabilizing, and predicts more consolidation in the financial services industry.
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Dave Brady, fund manager at Stein Roe, says now that Dow 10,000 is over, the market will grow at a 5 to 10 percent rate. He also thinks that after a period when growth stocks ruled, this could be the year of the value stock. Still, he likes growth favorites like Cisco (CSCO), MCI-WorldCom (WCOM) and Microsoft (MSFT).
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Barton Biggs, chief global strategist with Morgan Stanley Dean Witter, lived up to his reputation as something of a doomsayer about Wall Street stock valuations. On Friday he said investors should watch out for a spill in U.S. stocks, and he recommends Japanese equities and bonds.
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David Jones, chief economist at Aubrey G. Lanston, said Friday that low inflation is the force propelling the Dow toward the magic 10,000 mark, adding that interest rates will determine whether stocks will stay at these rarefied levels.
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Prudential Securities market guru Larry Wachtel said Friday that Dow 10,000 would be "exciting" but won't pull a lot of fresh funds into the stock market. Noting how only eight of the 30 stocks in the Dow have accounted for about 80 percent of the average's recent rise, he said, "you can see how narrow (the rally) really is."
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Michael Holland, chairman of Holland & Co., believes the psychological impact of Dow 10,000 could push many new investors into the market. Holland on Friday said he does not believe stocks are currently overvalued.
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Marshal Acuff, equity strategist at Salomon Smith Barney, says the market's running out of steam and predicts it likely will get stuck in a "fairly broad trading range." But Patricia Chadwick, director of U.S. equities at Invesco, says Dow 10,000 is "just another number." They both spoke Friday.
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Stock analyst Peter Cardillo of Westfalia Investments sees the Dow going as high as 10,500 by mid-April, but he cautions there may be a 12 to 15 percent correction, primarily hitting Dow stocks, soon thereafter. He spoke Thursday.
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