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STOCKS END '97 RUN OF RESILIENCE; DIP OF .1% CLOSES YEAR.

Byline: Phil Serafino Bloomberg News

As investors bought and sold their final shares in 1997, they had plenty to celebrate.

The bull market in U.S. stocks survived concern about rising U.S. inflation, slumping economies in Asia and expectations that corporate profits will slow. For 1997, the Standard & Poor's 500 Index returned 33.4 percent, including reinvested dividends, marking the third straight year the benchmark rose more than 20 percent.

To put the bull market in perspective, consider this: From 1926 to 1996, the S&P 500 returned an average of 10.7 percent a year, according to Ibbotson Associates, an investment consulting firm in Chicago.

``It has surpassed even our own optimistic expectations,'' said J. Robert Bloom Jr., chief investment officer at Friends Vilas-Fischer Trust Co. in New York, which manages $2.5 billion. As 1997 dawned, Bloom expected gains of 10 percent to 15 percent. That's his forecast for 1998 as well.

The Dow Jones Industrial Average, the most widely watched measure of U.S. stocks, rose 106 percent in the past three years - its best cumulative three-year performance since the period ending Dec. 31, 1935, when the average rose 144 percent.

Many investors say the key to the U.S. market's performance this year is the near-perfect economy here - slow, steady growth accompanied by low and falling inflation.

``You can call it the Teflon bull market,'' said Gary Campbell, chief investment officer at the Commerce Bank Investment Management Group in St. Louis, which manages $8 billion. ``We had some dramatic sell-offs, but the underpinnings of the market were very strong.''
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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Article Type:Statistical Data Included
Date:Jan 1, 1998
Words:264
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