UPDATE 1-Abby Cohen optimistic despite sell-off
Friday April 14, 8:34 pm Eastern Time
(Adds further comments, stock market closing prices)
By Greg Cresci
NEW YORK, April 14 (Reuters) - Speaking after the U.S. stocks suffered their biggest
one-day point loss ever on Friday, top investment strategist Abby Joseph Cohen struck an
optimistic tone and said equity prices are likely to rise from current levels.
Speaking on CNBC, the Goldman Sachs (NYSE:GS - news) analyst said the U.S. economic expansion is ``far from over' and
forecast that corporate profits will still go up. Addressing the beaten down technology sector, which until recently fuelled
spectacular stock market gains, Cohen said the outlook is bright for those companies with strong fundamentals.
``As we look forward, we are still very comfortable with the mainline technology companies, those primary companies with
fabulous product development, revenues and earnings.'
Cohen, who depressed stock prices recently by trimming the proportion of assets she advises clients to keep in stocks, said
corporate earnings reports may provide investors with comfort going forward.
``To the extent that the market is now lower, we think that there's a higher price appreciation likely from current levels.' Cohen
said companies in the financial services, pharmaceuticals and global cyclical sectors offer good potential buys.
As for the stomach-churning sell-off in Friday's market session, which left the Dow Jones industrial average (^DJI - news)
down 617.78 points, or 5.66 percent, at 10,305.77, and the Nasdaq composite (^IXIC - news) off 355.49 points, or 9.67
percent, at 3,321.29, Cohen said it had little to do with traditional economic forces.
``I think what we have seen (today) is very much a market event rather than an economic event,' Cohen said. ``As we take a
look at our expectations for earnings, economic growth and so on, really nothing has changed over the past two weeks.'
Cohen said inflation is unlikely to move dramatically higher and added that the Federal reserve will probably continue to raise
rates incrementally.
The Federal Reserve has raised interest rates five times since June.
``Clearly, the thing that we have concluded to this point is that there has been no change in the economic backdrop of the stock
market,' Cohen said. ``We think economic expansion continues throughout our forecast horizon (of) 2000-2001, and it's very
hard to find a period in which economic and profit growth continues and the bull market ends.' |
