Stock Rally May Stall, but Still Has Legs
Sat Nov 30, 7:37 AM ET
URL:http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=1&u=/nm/20021130/bs_nm/column_stocks_outlook_dc
By Herbert Lash
NEW YORK (Reuters) - After eight straight weeks of gains for blue chips, extending that streak next week may be too much to ask.
But some investors say this rally still has legs.
The almost 3 percent surge for the Dow Jones industrial average on the day before Thanksgiving is an auspicious sign for the year end, if similar gains before the U.S. holiday are indicative. Add December's traditional glow, and trading on past data could make the month a positive one for Wall Street.
Investors also will look at economic data next week, including an expected increase in manufacturing output in November and unemployment numbers for that month, which could provide impetus for further gains.
But caveats abound, with the biggest being the sharp run-up in the three major market gauges since they touched 5-year lows in early October, especially the surge in the technology-rich Nasdaq.
"I feel that the market may be getting a little ahead of itself and we may see some profit-taking next week," said John Person, head financial analyst at Chicago-based Alaron Trading Corp.
Since the low of Oct. 9, the Dow is up 22 percent, the Standard & Poor's is ahead 21 percent and the Nasdaq Composite Index has surged 33 percent. The Dow's eight-week streak is the longest stretch of weekly gains since March 1998.
A conference call with analysts by Finnish mobile phone maker Nokia (news - web sites) and a Credit Suisse First Boston annual technology conference on technology stocks in Scottsdale, Arizona, could provide news next week to take the wind out of tech stocks.
Nokia, whose shares have surged 83 percent since touching an almost 4-year intraday low of $10.51 on July 24, will discuss the company's prospects for 2003 with analysts in New York on Tuesday.
The CSFB conference that starts Monday and ends Thursday could also provide companies the outlet to make announcements, which could give investors an excuse to sell. The conference, which features 100 companies, is expected to draw top executives from Dell (NasdaqNM:DELL - news), Microsoft (NasdaqNM:MSFT - news) and Veritas Software (NasdaqNM:VRTS - news). |
