Stock Watchers Say Dow Heading Higher This Year on 'Rukeyser'
Bloomberg News
July 2, 1999, 11:52 p.m. ET
Owings Mills, Maryland, July 2 (Bloomberg) -- The Dow Jones
Industrial Average hasn't finished its bull run this year, stock
market watchers said on Public Broadcasting Corp.'s ''Wall Street
Week With Louis Rukeyser.''
Panelists told Rukeyser they believe the Dow will hit a high
of at least 11,400 this year, with one saying the Dow could reach
12,300. They said U.S. economic growth, continued consumer
confidence and an improving world economy are pushing the Dow.
''The consumer is confident, the consumer is flush and the
consumer is fueling this market,'' said Laszlo Birinyi of Birinyi
Associates Inc. ''So long as the growth is there, the consumer is
going to be confident and he's going to continue spending money
on the stock market.''
Birinyi said the Dow will peak just above 12,000 this year
and end the year near the 12,000 mark. He also predicted the
index would dip in the next six months to 10,500 before heading
higher.
Brian Rogers, a T. Rowe Price Associates fund manager, said
global growth has helped fuel some of the increase in the market.
He predicted the Dow will reach a high of 11,400 and fall to a
low of 9,000 in 1999's second half.
Liz Ann Sonders, a managing director of Avatar Associates,
said she expects the most-watched stock index's zenith to be
between 12,300 and 12,500. John Dessauer of Dessauer & McIntyre
Asset Management said the high will be 11,900. He said the low
will be 9,800 and forecast the market will end the year at about
11,500.
Further Fed Action
While unified in their Dow predictions, the panelists had
mixed views on the possibility of further interest-rate increases
by the U.S. Federal Reserve this year. On Wednesday, the Fed's
Open Market Committee raised the overnight bank lending rate by a
quarter point to 5 percent.
Sonders didn't rule out a rate increase, but added, ''as
long as the inflation picture stays as it has been and we don't
see too much growth, I think we're probably OK.''
Rogers said another increase could come if the economy
remains strong. Dessauer presented a different opinion, saying a
strong dollar may induce the Fed to lower interest rates.
Dessauer selected Rite Aid Corp. and Union Planters Corp.
for his stock picks and said he would sell off two of his
previous favorites, Citigroup Inc. and LSI Logic Corp., because
of their recent price gains. Among Sonders' recommendations were
MCI WorldCom Inc., Harley-Davidson Inc., Sylvan Learning Systems
Inc., EMC Corp. and BMC Software Inc.
Rogers said he expected Neiman-Marcus Group Inc., Abbott
Laboratories, Walt Disney Co., and Hershey Foods Corp. to do well
in coming months. Birinyi said he liked Compaq Computer Corp. and
Telephone and Data Systems Inc.
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