10,000 BY 2000?; CONTINUED ADVANCE NO LONGER FAR-FETCHED.Byline: Bruce Meyerson Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. 10,000 by 2000? With millennium markers falling like dominoes in the path of the mighty Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. , it's not such a far-fetched notion anymore. Yes, caution remains the catchword after the Dow's surprising nine-month romp past 6,000, 7,000, and, on Wednesday, a 63.17-point advance to 8,038.88. There were, after all, extremely tense moments just last summer and once again this past spring when it seemed Wall Street's joy ride might come to a crashing halt. Back then, few forecasters were bold enough to predict the lightning speed of the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. rebounds, and fewer still dared set targets as lofty as those the Dow and other stock measures have since reached. Yet, there's been significant change afoot in the market over the past year, and not only in stock prices. Slowly but surely, the Wall Street exuberance that had Federal Reserve Chairman Alan Greenspan Alan Greenspan Dr. Greenspan is Chairman of the Board of Governors of the Federal Reserve System. Dr. Greenspan also serves as Chairman of the Federal Open Market Committee (FOMC), the Fed's principal monetary policymaking body. so worried in December is seeming less and less irrational. Where 6,000 and 7,000 provoked considerable anxiety - Has the market gone too far too fast? - the predictable shower of doubt that has greeted the Dow's most recent exploits has been sprinkled with an unusual dose of confidence, as if to say, ``There's some method to this madness,'' and, ``The best is yet to come.'' None of this would be possible, of course, without ordinary Americans who continue to shovel savings into stock mutual funds, fueling market demand and pushing prices higher - a self-fulfilling investment prophecy. But it hasn't hurt that the economic backdrop has been nearly utopian in recent months. ``People are willing to pay even more for an ideal background of low inflation, moderate interest rates and strong earnings momentum,'' said Michael Metz Michael Metz (born June 16, 1964) is a former field hockey player from Germany, who won the silver medal at the 1988 Summer Olympics in Seoul, South Korea for West Germany. , the chief investment strategist at Oppenheimer & Co., known for his dubious view of the market's stamina. Although most experts foresee numerous bumps along the road to continued prosperity, many have grown more comfortable with the cockiness cock·y adj. cock·i·er, cock·i·est Overly self-assertive or self-confident. cock  i·ly adv. behind the market's rapid ascent, won over by what some
are trumpeting as a new age without boom-and-bust cycles.
``The new era model is becoming very fashionable,'' said Edward Yardeni, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at Deutsche Morgan Grenfell and an outspoken forecaster whose 1995 prediction that the Dow would hit 10,000 by the end of 1999 wasn't taken very seriously until recently. At 6,000 and 7,000, ``there was more nervousness about the market,'' said Yardeni. ``I won't say I didn't flinch flinch intr.v. flinched, flinch·ing, flinch·es 1. To start or wince involuntarily, as from surprise or pain. 2. To recoil, as from something unpleasant or difficult; shrink. n. and twitch twitch (twich) a brief, contractile response of a skeletal muscle elicited by a single maximal volley of impulses in the neurons supplying it. twitch v. 1. a little bit (during last summer's downturn), but I was convinced that the fundamentals remained very bullish. Now that everybody recognizes the bullish fundamentals, I'm looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. what can go wrong'' on the way to 10,000. ``The major risk for stocks is that we move too high too fast.'' Ralph Acampora, the similarly outspoken director of technical research at Prudential Securities, had predicted last fall that the Dow would hit 8,250 this year. Last month, he issued an even more strident forecast. ``We expect the stock market to mount an explosive advance during the second half of this year,'' Acampora said in a research report. ``Assuming that we are correct and the entire stock market experiences a classic `blowoff' (buying panic buying panic A period of rapidly rising stock prices on very high volume as investors, speculators, traders, and institutions attempt to establish investment positions without regard to price. ), there is a very good chance the (Dow) could actually hit 10,000 within the next 12 months.'' Such assertions, predicated on economic fundamentals and market psychology, aren't so surprising coming from Acampora. But suddenly, his sensational predictions are beginning to harmonize quite well with those emanating from more mild-mannered corners of the market. ``The set of expectations approaching 8,000 are more market friendly,'' said Jeffrey Applegate, chief investment strategist at Lehman Brothers Lehman Brothers Holdings Inc. (NYSE: LEH), founded in 1850, is a diversified, global financial services firm. It is a participant in investment banking, equity and fixed income sales, research and trading, investment management, private equity, and private banking. , which has boosted its 1997 Dow target from 7,250 to 8,350. ``We still come back to basic fundamentals. We still have the best inflation rate, the best corporate profits and productivity that we've had in 35 years,'' said Applegate, contending that in such an environment, the 25 percent advance from 8,000 to 10,000 should be easily attainable in the next 2-1/2 years. ``Thirty-five years ago, we had a good market for several years. If all these fundamentals remain good, we'll have good market for several years again,'' he said. UP IN THE VALLEY Some local, publically traded companies have benefited from the markets' run-up. Here's how some selected stocks have moved since Feb. 13, when the Dow was at 7,000. Company, headquarters, price on July 16, price on Feb. 13, percentage change Amgen, Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. , $57.25, $60, +4.8 percent Disney, Burbank, $77.375, $78.875, +1.9 percent Dole Food, Westlake Vilage, $38.625, $44, +13.9 percent International House of Pancakes, Glendale, $26.50, $31, +17 percent Newhall Land and Farming, Valencia, $17.375, $22.06, +27 percent Superior Industries, Van Nuys, $25.375, $26.625, +4.9 percent 20th Century Industries, Woodland Hills, $18, $22.50, +25 percent Wellpoint Health Networks, Woodland Hills, $34.75, $50.56, +45.5 percent Xylan xylan /xy·lan/ (zi´lan) any of a group of pentosans composed of xylose residues; major structural constituents of wood, straw, and bran. , Calabasas, $21, $16.69, -20.5 percent Big days on Wall Street Here is a look back at milestones during the 101-year history of the Dow Jones industrial average, which closed above 8,000 Wednesday for the first time: May 26, 1896: Dow Jones Dow Jones the best known of several U.S. indexes of movements in price on Wall Street. [Am. Hist.: Payton, 202] See : Finance & Co. introduces an average of 12 industrial stock prices, which closes its first day at 40.94. Among the 12 stocks included are American Cotton Oil, Tennessee Coal & Iron and U.S. Leather. Oct. 29, 1929: The average tumbles 30 points to 230.07, some 51 percent below its all-time high of 469.49 set Sept. 19. March 12, 1956: The industrials close above 500 for the first time, at 500.24. America's steel mills operate at 100 percent of capacity. Chesapeake & Ohio Railway coal carloadings run 25 percent ahead of 1955. Westinghouse Electric Corp. and the International Union of Electrical Workers resume negotiations in a 149-day-old strike. February 1966: The average reaches a 1960s closing high of 995.14, less than half a percentage point from 1,000. It took six more years to pass that hurdle. Nov. 14, 1972: The average finally closes above 1,000 for the first time at 1,003.16, days after Richard Nixon beat South Dakota South Dakota (dəkō`tə), state in the N central United States. It is bordered by North Dakota (N), Minnesota and Iowa (E), Nebraska (S), and Wyoming and Montana (W). Sen. George McGovern George Stanley McGovern, (born July 19, 1922) is a former United States Representative, Senator, and Democratic presidential nominee. McGovern lost the 1972 presidential election in a landslide to incumbent Richard Nixon. in the presidential election. Third-quarter profit growth is 18 percent ahead of 1971's rate. Jan. 8, 1987: The industrials rise 8.3 to close above 2,000 for the first time, at 2,002.3, fueled by declining interest rates, falling inflation and purchases by corporations and overseas buyers. Companies are big buyers of stock amid multibillion-dollar takeovers and leveraged buyouts leveraged buyout, the takeover of a company, financed by borrowed funds. Often, the target company's assets are used as security for the loans acquired to finance the purchase. . Oct. 19, 1987: The average dives 508 points to 1,738.74, about 36 percent below its record of 2,722.40 set two months earlier. April 17, 1991: The industrials close at 3,004.46, their first finish above 3,000, amid expectations the economic slowdown would soon end. Share prices surged as U.S.-led military forces pushed Iraq out of Kuwait, oil prices fell and the Federal Reserve pushed down rates. Yields on three-month Treasury bills drop to 5.71 percent from 7.6 percent in the middle of 1990. Feb. 23, 1995: The Dow industrials rise above 4,000 for the first time, reaching a high of 4,020.49 and closing at 4,003.33, helped by expectations that a yearlong rise in interest rates was ending and corporate earnings would keep growing. Nov. 20, 1995: The Dow industrials rise above 5,000 for the first time, only nine months after passing 4,000. The average reached an intraday Intraday Another way of saying "within the day." Notes: This term is often used for the new highs and lows of a security. For example, "a new intraday high" means a security reached a new all-time high throughout the trading day, but then fell by closing. high of 5,024.63 and closed at 5,023.33, as expectations that low interest rates would keep the economy pumping for months to come drove up shares of Caterpillar Inc. and Aluminum Co. of America. Oct. 14, 1996: The Dow industrials rise 40.62 to 6,010, to close above 6,000 for the first time. The average broke through the latest barrier during trading a week ago, though it was unable to finish there. The Standard & Poor's 500 Index, which crossed 700 for the first time a week ago, and the Nasdaq Composite Index Nasdaq Composite Index An index that indicates price movements of securities in the over-the-counter market. It includes all domestic common stocks in the Nasdaq System (approximately 5,000 stocks) and is weighted according to the market value of each listed also rose to records. A number of individual stocks are at all-time highs, among them Intel Corp. and Microsoft Corp. Feb. 13, 1997: The Dow industrials close 60.81 higher at 7,022.44, passing 7,000 for the first time. The milestone represents the fastest 1,000-point advance in Dow history: four months. The previous record was the nine months it took for the Dow to reach 5,000 in 1995. July 16, 1997: The Dow average rises above 8,000 for the first time, closing 63.17 higher at 8,038.88. The government reports inflation fell to an 11-year low in the first half of the year, even as the U.S. economy continued to expand. J.P. Morgan & Co. and Travelers Group Inc. lead the advance as falling interest rates brighten bright·en tr. & intr.v. bright·ened, bright·en·ing, bright·ens To make or become bright or brighter. bright the outlook for corporate profits; General Motors Corp. reports unexpectedly strong earnings. ?13Bloomberg News CAPTION(S): box, Photo, chart CHART: UP IN THE VALLEY (see text) Photo: (color) Traders conduct business on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. Wednesday. Associated Press BOX: Big days on Wall Street (see text) |
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