More Investors Turn Bearish - Survey
Reuters
Monday, October 18 1999 05:03 PM EDT
NEW YORK (Reuters) - A growing minority of U.S. individual
investors is turning bearish on the stock market because of rising
interest rates and gyrating share prices, according to a survey released
Monday.
Some 21 percent of investors are pessimistic on the U.S. stock
market's outlook, the highest percentage since March 1997,
according to a quarterly survey of 500 investors by brokerage firm
Quick & Reilly. Some 45 percent of investors polled between Sept.
21-24 remained bullish, down from 59 percent in May when the unit
of Boston bank Fleet Financial, last conducted the survey.
Individual investor surveys in recent years have proven a better
market indicator than they used to be because investors are more
knowledgeable and active in financial markets.
Savvy traders previously used retail investor sentiment as a contrarian
indicator, because these investors always seemed to buy at the stock
market's top and sell at the low.
''The old school of thought was when the retail investor was in the
game, it was an indication that the end of the bull market cycle was
fast approaching,'' said Quick & Reilly's president, Tom Quick, in a
telephone interview. ''That really hasn't been the case for some time:
You have never had a group of people that are more connected,
more involved in the markets than we have had in the last 10 years.''
The Internet and cheap computers have enabled individual investors
to research companies, invest wisely and plan their own financial
future, Quick said.
Quick & Reilly attributed the rising bearish sentiment to the stock
market's recent decline, although the main averages are still up for the
year. Rising interest rates and fear of inflation have led to big price
swings in individual stocks and the broader market on the last few
months.
The Dow Jones Industrial Average has dropped more than 10
percent from its August high of 11,326, a drop known on WallStreet
as a ''correction.'' The Dow Monday dipped below the
psychologically important level of 10,000, but closed up 96.6 points
at 10,116 helped by rising bank shares on strong earnings.
Some 31 percent of investors surveyed said they had changed their
stock market outlook markedly in the last six month. Of this group,
almost three-quarter was now more pessimistic than six months ago,
according to the survey.
Still, Quick did not expect any individual investors to dump their
share. Investors have learned to sit tight during downturns and a
majority is still bullish, he said.
The survey also polled investors on stock trading beyond the close of
regular New York markets. Many brokerage firms recently have
rushed to offer the service, citing investor demand.
But the survey found just 48 percent of investors interested in trading
after hours. Of this group, some 60 percent worried that the
after-hours market may not attract enough buyers and sellers.
RTR/BUSINESS-MARKETS-INVESTORS/
Copyright © 1999 Reuters Limited. All rights reserved. Republication or redistribution of
Reuters content, including by framing or similiar means, is expressly prohibited without
the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in
the content, or for any actions taken in reliance thereon. All active hyperlinks have been
inserted by AOL.com.
aol.com |
