Associated Press
NEW YORK – Wall Street extended its advance Monday with a moderate rally that boosted technology stocks but ultimately failed to take the Dow Jones industrials above 10,000.
Analysts attributed investors’ tentativeness to their worries that stock market might be rising too much, too quickly. The Dow has been flirting with the 10,000 level and bull market territory during the last several sessions. A report from the National Bureau of Economic Research confirming that the United States is in a recession added to the debate.
“There’s a tug-of-war between the bears and the bulls here,” said Brian Belski, fundamental market strategist at US Bancorp Piper Jaffray. “I think the market is in pretty good shape. The problem, I think, though, is that many investors are having a hard time diagnosing when earnings will start to turn positive. And we don’t see positive earnings, positive growth until the latter half of 2002.”
The Dow is now more than
21 percent above the 2001 low set Sept. 21 after the terror attacks. A bull market technically is defined as a 20 percent or greater recovery from a low.
“The Dow passing back over 10,000 will generate a headline or two, and that should stir some enthusiasm among individual investors. Whether it’s sustainable or not will depend more on underlying fundamentals: Is this economy bottoming out and about to recover? Are profits about to bottom out and recover?” said Charles G. Crane, strategist for Victory SBSF Capital Management. “We won’t know those answers for sure for a while.”
Indeed, analysts warn against confusing a rebound with a rally. They note that much of stocks’ recent gains have come as the market makes up the precipitous losses that followed the terrorist attacks. Investors have shown limited faith in the gains, selling stocks periodically for fear the run-up won’t continue.
Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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